Western International Securities Broker Dawn Bennett Guilty Of Fraud

Dawn Bennett (CRD#: 1567051, Chevy Chase, Maryland) has been a registered representative of Western International Securities, Inc. between October 1, 2009 and December 1, 2015. On October 17, 2018, the United States Attorney’s Office for the District of Maryland announced that a federal jury found Bennett guilty of wire fraud, conspiracy, bank fraud, false statements on a loan application, and securities fraud based on findings that she operated a Ponzi scheme. Criminal Case #: 8:17mj2292.

Jury Finds Dawn Bennett Guilty Of Operating Ponzi Scheme

Bennett reportedly owned and operated DJB Holdings, LLC (DJBennett.com) – an internet based luxury clothing business. Evidently, from December 2014 to April 2017, Bennett steered individuals to invest in her luxury sportswear company. Bennett offered investors promissory notes or convertible notes paying 15% annually. In soliciting those investors, Bennett apparently made misleading and false statements. Particularly, Bennett misrepresented the risks of making investments in DJB Holdings, falsified the way that the investors’ money was to be utilized, and made erroneous representations relating to the company’s assets and inventory guaranteeing the loans.
Furthermore, Bennett made false statements to customers about the liquidity of those investments. In the trial, witnesses testified that Bennett obscured from investors the company’s shaky financial condition. And Bennett was able to convince a number of investors that they should take money from their retirement accounts to loan money to, and invest in, Bennett’s companies. After all, investors supposedly thought that they were not taking much risk; they were deceived.

Customers' Funds Misappropriated For Dawn Bennett's Luxurious Lifestyle

Ultimately, Bennett misappropriated those investors’ funds in order to pay for her luxurious lifestyle. That is, Bennett misused investors’ funds to pay for, inter alia, cosmetic procedures, a luxury suite at a football stadium, astrological gems, and for priests to undertake religious rituals geared towards deflecting federal investigators. Person must have figured that priests’ rituals could make the federal investigators disappear.
In addition, Bennett utilized the investors’ money to pay prior investors. Critically, Bennett convinced new investors to provide Bennett money because of being promised high rates of return with low risk; used the investors’ funds for a different reason; then made payments to earlier investors with the funds received from new investors. The findings revealed that Bennett’s fraudulent activities in this regard fit the mold of a Ponzi scheme. Bennett reportedly procured at least $20,000,000.00 from a total of 46 investors, most of which were elderly.
Futhermore, DJB Holdings, LLC procured a credit line of $750,000.00 in May of 2015, where Bennett was listed as the credit line guarantor. However, in order to get this loan, Bennett falsified statements to the bank. Bennett seemingly claimed to the bank that she had a $4,000,000.00 brokerage account when her account was valued at merely $35.00. Bennett evidently used the $750,00.00 to pay off investors and her personal expenses, contrary to the stated purpose of the loan. Then, by February 2016, Bennett defaulted on the loan. Of course, Bennett lied about the circumstances of the default.

SEC and FINRA Bring Charges Against Dawn Bennett

At least two securities regulators have gone after Dawn Bennett for her fraudulent activities. Specifically, Securities and Exchange Commission (SEC) filed a Complaint against Bennett on August 28, 2017 alleging securities fraud. The Complaint stated that Bennett violated Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. SEC also alleged that Bennett violated Sections 5(a) and 7(a) of Securities Act of 1933.
Second, FINRA filed a Complaint against Bennett alleging that she failed to cooperate with FINRA staff, who was investigating Bennett for private securities transactions, fraud and conversion. FINRA alleged that Bennett violated FINRA Rules 2010 and 8210 because of her failure to provide testimony to FINRA investigators. It appears that both FINRA’s and SEC’s actions related to the findings cited in the criminal action against Bennett.

Customers Allege Dawn Bennett Gave Unreasonable Advice

Moreover, at least fourteen customers have come forward with complaints against Bennett. Those customers alleged to have been harmed while Bennett was associated with Wheat First Securities, Inc., Royal Alliance Associates, Inc. and primarily Western International Securities, Inc. Some of those complaints have been summarized below:

December 11, 2017 Complaint

A customer of Western International Securities Inc. filed a written complaint on December 11, 2017 regarding Bennett. The customer contended that a promissory note sold to the customer was unsuitable. In addition, the customer alleged to have been a victim of elder abuse. Records show that the customer requested $600,000.00 in damages. The complaint is still underway.

November 1, 2016 Arbitration

A Western International Securities Inc. customer filed FINRA Arbitration #16-03139 on October 28, 2016. According to the customer, Bennett made poor investment recommendations of exchange traded funds and mutual funds. Because of this, the customer incurred investment losses estimated at nearly $500,000.00. The matter is pending.

May 2, 2016 Arbitration

On May 2, 2016, a Western Intentional Securities, Inc. customer filed FINRA Arbitration #16-01259. First, the customer claimed that exchange traded funds were not suitable for the customer. Second, the customer contended that the terms of investing in the exchange traded funds were misrepresented. As a result, the customer sought $100,000.00 in damages. The customer’s matter is awaiting a resolution.

February 21, 2014 Arbitration

FINRA Arbitration #14-00575 was filed by a customer of Western International Securities, Inc. on February 21, 2014. From the customer’s standpoint, Bennett negligently handled the customer’s investments and make unreasonable investment recommendations. What’s more, the customer alleged that Bennett breached a fiduciary duty, committed fraud, and violated Florida Statues Section 517.301. Ultimately, on November 9, 2016, an Arbitration Panel ruled that Bennett was liable, and ordered Bennett to pay the customer $850,000.00 in damages.

If you have suffered losses by investing with Dawn Bennett, call (888) 760-6552 for a free consultation with Soreide Law Group’s experienced counsel. Our firm has recovered millions of dollars for investors who have been victim to broker and brokerage firm misconduct. We represent clients on a contingency fee basis and advance all costs.