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Investment adviser charged with fraud
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Federal and state authorities say a Honolulu investment adviser made millions by fraudulently gaining access to the financial accounts of retirees and other older investors.
Mark Teruya, 35, and his company, Senior Resources of Hawaii Inc., are accused of securities fraud violations, according to the U.S. Securities and Exchange Commission. Hawaii's securities commissioner, meanwhile, issued a preliminary cease-and-desist order against Teruya and his firm.
The SEC alleges Teruya wined and dined potential clients, then induced them to sign fraudulent documents giving him access to their accounts. Once he had access, the SEC alleges, he sold them securities without their knowledge and made $2 million in commissions on other unauthorized sales.
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Federal authorities have accused a Honolulu investment adviser of ripping off retirees and other older investors by luring them to free meals at restaurants and hotels and inducing them to sign fraudulent authorization forms providing access to their assets.
The U.S. Securities and Exchange Commission filed securities fraud charges yesterday against Mark Teruya, 35, and his company, Senior Resources of Hawaii Inc., which does business as USA Wealth Resources.
Simultaneously, the Hawaii securities commissioner issued a preliminary cease-and-desist order against Teruya and the company. The state also alleges Ronda Teruya, Rodelia Ferrer and Craig Teruya committed securities fraud.
The state action also seeks to revoke Teruya's license as an investment adviser representative, the SEC said in a news release.
Teruya did not return telephone messages seeking comment yesterday.
He has 30 days to request a hearing on the matter. If no hearing is requested, the cease-and-desist order becomes permanent, said Hawaii Securities Commissioner Tung Chan.
Chan said there are 19 individuals who have complaints pending against Senior Resources and as many as 32 actions that were committed that may have violated federal securities laws.
"This indicates that he's doing a widespread business plan," Chan said. "He's got a pattern."
The cases, some of which date back to 2004, involve about $5 million in assets that were allegedly tampered with, Chan said.
The SEC complaint, filed in U.S. District Court in Honolulu, alleges that the defendants would offer free meals as part of financial planning seminars for retirees and older investors.
Seminars were advertised in local newspapers, direct mailing and magazines geared toward retirees.
At the seminars, defendants would make their sales pitches and try to induce the clients to provide authorization to access their assets, the complaint said. Seminar attendees sometimes were rushed into signing forms they were not able to review and even blank documents in some cases, the complaint said.
According to the SEC, Teruya used the signed forms to sell the clients securities holdings without their knowledge or authorization. He then allegedly used the proceeds of the unauthorized sales to purchase annuities for which he received commissions totaling about $2 million.
The complaint charges the defendants with violating anti-fraud provisions of federal securities laws. It seeks preliminary and permanent injunctions, return of ill-gotten financial gains and civil penalties.
Authorities said the case was the first connected to a yearlong examination by the SEC and other regulators of financial services firms offering "free lunch" investment seminars that target older investors. Full results of the examination sweep are to be released Monday.