U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25743 / June 8, 2023
Securities and Exchange Commission v. Tarek D. Bahgat, Lauramarie Colangelo, and WealthCFO LLC, No. 17-cv-0971-LJV (W.D.N.Y.)
SEC Obtains Final Judgment Against Investment Adviser Tarek D. Bahgat
A federal district court in the Western District of New York entered a final judgment by default against Tarek D. Bahgat, an investment adviser formerly based in Amherst, New York.
The SEC's complaint alleged that Bahgat misappropriated over $378,000 from seven of his investment advisory clients. The SEC alleged that Bahgat illicitly obtained internet access to some of his clients' brokerage accounts by impersonating, or having his co-defendant, Lauramarie Colangelo, impersonate Bahgat's clients during telephone calls with broker-dealers holding the clients' accounts. This enabled Bahgat to cause money to be transferred from the clients' account to Bahgat and to his company, relief defendant WealthCFO, LLC. The SEC's complaint charged Bahgat with violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act"). The complaint sought permanent injunctions, disgorgement, prejudgment interest and civil penalties from Bahgat.
The SEC obtained a default judgment against Bahgat after he didn't respond to the Commission's complaint. On June 6, 2023, the Court enjoined Bahgat from violating Sections 206(1) and 206(2) of the Advisers Act; ordered Bahgat to disgorge $378,021.97; $142,057.43 in prejudgment interest; and imposed a civil penalty of $378,854.00 pursuant to Section 209(e) of the Advisers Act.
Final judgments have previously been entered against defendant Colangelo and relief defendant WealthCFO.
For further information, see Litigation Releases No. 23951 (Sept. 29, 2017), No. 24192 (July 10, 2018), and No. 24284 (Sept. 21, 2018).