Barred Ex-Wirehouse Broker Kept Raising Money from Retail Investors, SEC Says
A former wirehouse broker in Florida raised $2.7 million in an unregistered offering from mostly elderly investors less than two years after he was barred from the securities industry for stealing a client’s money and for unauthorized trading, the Securities and Exchange Commission said on Tuesday.
Rafael “Ralph” Calleja, a former broker at Morgan Stanley, Merrill Lynch and UBS Financial Services who was barred permanently in 2012, raised money from 10 elderly or retired investors in 2014 through an unregistered investment company and failed to disclose his regulatory history, the Commission charged in a civil complaint filed in federal court in the Southern District of Florida.
Calleja, who is 42 and lives in Naples, Fla., guaranteed investors that their principal was insured and touted a fixed-rate of return, which the lawsuit does not disclose, if they locked up the money for at least a year with in Tower Trade Group USA, a company he managed and partly owned.
He invested some of the $2.7 million that he raised with an unidentified foreign affiliate of Tower and used at least $123,000 for golf outings, shopping and cruises, among other personal “enjoyments,” the SEC said.
The foreign entity repaid investors in full when it discovered the funds were being misused, the SEC said.
Calleja on Tuesday agreed to an SEC order enjoining him from further violations of securities laws. The Commission also ordered him to disgorge $123,000 and interest but waived the penalty in light of Calleja’s inability to pay, according to the complaint.
Calleja’s attorney, Lenny Bloom of Akerman LLP, did not respond to a call for comment on the allegations, which were reported Tuesday by Reuters. Tower Trade Group ceased operations in March 2015 and officially closed in July this year, the SEC said.
The Financial Industry Regulatory Authority barred Calleja in September 2012 for unsuitable and unauthorized trading, as well as for withdrawing $67,000 from the bank account of a client who gave the broker access to a personal debit card, the complaint said.
Calleja began his career at Olde Discount Corporation in Detroit in 1996, moved to UBS Financial Services in 1998 and worked at Merrill Lynch in Tampa from 2004 to 2008. He jumped to Morgan Stanley in June 2008 and remained there until November 2011, according to Finra’s BrokerCheck database.