Department of Financial Regulation

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Raymond James settles with Vermont for $5.95 million

MONTPELIER — The state has reached a $5.95 million settlement with Raymond James and Associates in connection with a massive EB-5 fraud case in the Northeast Kingdom. Department of Financial Regulation Commissioner Susan Donegan announced the settlement with the financial firm Thursday, noting the department found “multiple instances of non-compliance with supervisory requirements and Vermont law.”

“DFR’s responsibility is to ensure that Vermont’s securities laws are followed, and that investors are protected,” Donegan said in a release. “Since the SEC’s seizure of the Jay Peak-related EB-5 projects, investors have been rightly concerned about possible recovery of funds. This settlement contributes to their restitution.”

The settlement follows an investigation and the filing of fraud charges in April against Bill Stenger and Ariel Quiros, the principals of several development projects, including Jay Peak, using the federal foreign investor program. Quiros and Stenger are accused by both the federal Securities and Exchange Commission and the state of misusing about $200 million of the $350 million they raised from foreign investors in $500,000 increments. Continue Reading →

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Documents show feds were onto Quiros long before state launched probe

ederal authorities launched an investigation into Jay Peak’s EB-5 projects nearly a year before state officials had their first inkling that something illegal was afoot. And documents on file at the Securities and Exchange Commission indicate that the agency had strong forensic evidence of a massive fraud well before the changes in state regulatory oversight that Gov. Peter Shumlin now credits for taking down the “Ponzi-like” scheme. On May 22, 2014, at about 10:30 in the morning at SEC offices in Miami, Florida, federal lawyers grilled Ariel Quiros about a series of financial transactions detailing alleged misappropriation of funds from the foreign investors. The 245-page transcript of their day-long interview reveals pieces of the evidence the SEC would later use to file dozens of federal civil charges against Quiros, the owner of Jay Peak, and Bill Stenger, the resort CEO that federal authorities say facilitated the scam. SEC lawyers conducted that deposition seven months before a memorandum of understanding that shifted the state’s financial oversight of Quiros’ and Stenger’s dealings away from the Agency of Commerce and Community Development, and over to the Department of Financial Regulation. Continue Reading →

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