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In what appears to be part of a push to tag a local investment adviser for securities law violations, the Securities and Exchange Commission last week filed a new lawsuit against Edward Tackaberry, former principal of Pittsford Capital Income Partners LLC, and almost simultaneously settled the case.
Midway between filing of a court complaint against Tackaberry on Sept. 21 and filing a previously agreed settlement of the case five days later, the SEC also named Tackaberry in a separate administrative action aimed at his former boss in an alleged scheme to lure more than a dozen investors into sinking some $850,000 into questionable investments.
Targeted by the regulatory agency in an administrative complaint filed Monday was David Mura, a onetime vice president and general manager of J.P. Turner & Co. LLC's Pittsford office. The SEC complaint alleges that Mura was fired last year for failing to disclose outside activities. Those activities included sales of the same unregistered securities named in the SEC's new court complaint against Tackaberry.
Mura could not be reached for comment.
In the Sept. 21 civil action, filed in U.S. District Court in Rochester, the SEC alleged that Tackaberry defied a 2007 order barring him from the securities industry. The lawsuit accused Tackaberry of selling promissory notes of three ventures-Charge-On-Demand LLC, Stucco LLC and Innovations Group Enterprises LLC-from 2007 to 2009.
In the separately filed administrative complaint on Monday, the SEC accuses Mura of orchestrating a scheme to push the same promissory notes. The Sept. 21 lawsuit describes Tackaberry as a primary contact for prospective purchasers of the notes.
At least 17 individuals invested in the promissory notes, and at least seven of those investors sank most or all of their retirement savings into the unregistered securities, the complaint against Mura states. It credits Mura with $765,000 worth of promissory note sales.
The Mura complaint describes the three LLCs as outgrowths of Rising Storm Technologies LLC, a venture Mura first became involved in as an investor. Later he allegedly took over partly by intimidating its founder with death threats and threats of bodily harm. In addition to directly inducing investors to put money into the LLCs, Mura relied on a network marketing strategy in which he paid investors commissions for bringing others into the scheme, the complaint alleges.
The LLC's promissory notes did not pay the 8 percent interest Mura promised to investors, it says. And Mura wrote checks totaling $50,000 to himself on LLC bank accounts from money that ultimately came from investors, it adds.
After moving investors from Rising Storm into the three LLCs, Mura convinced some to put money into a fourth venture, Worldwide Medical LLC, a move that ate further into the investors' principal, the complaint alleges.
Tackaberry's alleged participation in promissory note sales came when he was under orders to avoid the securities industry.
Acting in a civil suit the SEC filed in 2006, U.S. District Judge Michael Telesca in 2007 ordered Tackaberry and his former partner, Mark Palazzo, to disgorge $25.8 million as compensation for sums lost by 275 investors who had put money into private placements Tackaberry and Palazzo sold through Pittsford Capital Income Partners.
In court papers filed in that earlier action, Telesca described Tackaberry and Palazzo, who is not named in the new SEC suit, as "trained securities professionals who repeatedly made false and misleading statements and omissions to investors, knew what they were doing and ... did it with fraudulent intent."
Court documents record Tackaberry's and Palazzo's contributions toward the $25.8 million in restitution as totaling $324.75 so far-$260 from Tackaberry and $64.75 from Palazzo-with no payments made by either until February.
Both are working in real estate sales in the Rochester area. Earlier this month, Palazzo did not respond to a request for comment.Tackaberry acknowledged some activity in real estate sales but said he had not sold any properties and described himself as not having worked in three years.
In a 2010 ruling, Telesca cited evidence that Tackaberry had then been earning $6,000 a month, was depositing money in his wife's bank account and had taken steps to put assets, including his home, in his wife's name. Though Tackaberry then claimed the SEC was blocking his attempts to sell his house to get funds to repay investors, the SEC denied that, the judge added.
In the newly filed and quickly settled case, SEC attorney David Stoelting, who also handled the 2006 case, claims that despite having signed a 2007 promise not to sell securities or associate with securities dealers, Tackaberry worked as a securities salesman under Mura.
In an interview this week, Tackaberry said the Sept. 21 court complaint closely mirrors an administrative complaint the SEC filed against him some two years ago and he already had inked a settlement with the SEC last week before the case was filed in court. A Sept. 21 news release on the SEC website mentions the settlement, then not yet filed with the court.
In it, Tackaberry promises, without admitting to wrongdoing, to refrain from committing securities violations detailed in the lawsuit. He also promises to neither employ nor associate with individuals engaged in securities sales.
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