SEC Charges Midtown Partners Broker Kevin Gillespie With Fraud

Kevin Patrick Gillespie (CRD #2485051, New York, New York) has been a registered representative and part-owner of Midtown Partners from April 27, 2016 to August 10, 2018. He is also the chief executive officer of Arias Intel Corp. (ASNT) – a digital media company headquartered in Florida focused on the cannabis industry. On July 6, 2018, the Securities and Exchange Commission (“SEC”) charged Gillespie with committing securities fraud. United States Securities and Exchange Commission vs. Kevin Gillespie, et. al., Case #3:18-cv-01530-BEN-JLB.

Midtown Partners Rep Accused Of "Pump And Dump"

The Complaint alleged that in 2017, on behalf of ASNT, Gillespie arranged with the company’s advisor, Annetta Budhu, and ASNT’s lender, Andrew Hackett, to “pump and dump” ASNT’s stock. The SEC described a pump and dump scheme as one that involves several individuals who control trading of an issuer’s thinly-traded stock through inflating the issuer’s volume and share price, only to dump the shares for financial gain when the issuer’s share attains a target price.
The SEC alleged that Gillespie caused ASNT to effectuate an advisory agreement with Budhu in February 2017, where Budhu was to provide consulting services in return for 200,000 ASNT stock shares. After the shares had been issued to Budhu, she sold Hackett those shares at a price which was substantially greater than the price that ASNT traded for at the time.
The Complaint stated that Gillespie subsequently caused ASNT to issue a $300,000.00 phony convertible promissory note to Hackett, enabling Hackett to execute the conversion for 750,000 ASNT stock shares. Apparently, Gillespie, Budhu and Hackett made arrangements for the 950,000 ASNT stock shares to be sold by Hackett through a pump and dump scheme, where the three individuals were expecting to split the profits.
The SEC claimed that the Gillespie, Budhu and Hackett made secretive arrangements in October 2017 for a person to promote ASNT stock within TheMoneyStreet as part of the pump and dump scheme. Apparently, that person recorded the communications from Gillespie, Budhu and Hackett, and then declined to promote ASNT stock.
However, the person arranged in December 2017 for Hackett to be introduced to a purported ringleader of a corrupt stockbroker network to facilitate the pump and dump scheme. Hackett was allegedly informed that the ringleader would take the stock off Hackett’s hands through effecting unauthorized purchases of the stock in the ringleader’s customers’ investment accounts. Hackett was seemingly unaware at that time that the purported ringleader was actually an undercover FBI agent. Hackett then proceeded to sell 14,000 shares between December 2017 and January 2018 through a matched trading arrangement with the undercover agent.
SEC alleged that Gillespie, Budhu and Hackett all violated Section 10(b) of the Securities Exchange Act of 1934 in addition to Rule 10b-5(a) and Rule 10b-5(c). SEC has also requested that Gillespie, Budhu and Hackett pay civil penalties and be disgorged of any illicit gains in connection with their alleged scheme.
A week after the SEC filed fraud charges against Gillespie, on July 13, 2018, Midtown Partners terminated him. Midtown alleged that the basis for Gillespie’s termination was him being subject of the SEC’s civil action concerning his possible fraudulent investment scheme.
Gillespie disclosed on FINRA BrokerCheck that his prior activities with employer GunnAllen Financial caused two customer disputes to be filed between September 7, 2000 and November 25, 2002. Customers collectively alleged misrepresentation, excessive commissions, churning, unauthorized trading, unsuitability and poor investment performance. Their claims were resolved for a combined $125,000.00 in damages.
Gillespie has also been employed with Anderson & Strudwick, Incorporated (April 12, 2010 to June 15, 2011) and J.P. Turner & Company, L.L.C. (May 20, 2011 to January 27, 2015).

Investors who have incurred losses from Kevin Patrick Gillespie are encouraged to contact Soreide Law Group at (888) 760-6552 for a free consultation. Our firm has recovered millions of dollars for investors who have suffered losses due to broker and brokerage firm misconduct. We represent clients on a contingency fee basis and advance all costs.