Two Financial Advisors from Buffalo Charged with Fraud by the SEC

On December 10, 2014, the SEC filed civil fraud charges against TIMOTHY S. DEMBSKI and WALTER F. GRENDA JR., from the Buffalo area and their company, Reliance Financial Advisors.

According to the SEC, financial advisor, Timothy S. Dembski, allegedly lost nearly $4 million of his client’s money through investing it in a hedge fund. His partner Walter F. Grenda Jr., allegedly borrowed $175,000 from clients, telling them that he would use the money for his business, when in fact the majority of the funds went for his own personal expenses.

According to the SEC, the two men allegedly made false statements to their clients. Many of these clients were elderly and had limited investment knowledge. A former debt collector who became the hedge-fund manager, Scott M. Stephan, was also charged. Stephan and Dembski co-owned the hedge fund, Prestige Wealth Management Fund.

Grenda pulled his clients out of the fund in October of 2012 after his clients lost around 4 percent of their investment. However, Stephan and Dembski continued on with the fund.

The Prestige Wealth Management Fund lost approximately 80 percent of its value in December of 2012. The SEC said it was because of Stephan manually investing and trading in stock options that Dembski’s clients lost the majority of their Prestige Fund investments.

The SEC settled its case against Scott Stephan, and he was permanently barred from working in the securities industry. He also faces penalties and possible additional disgorgement of funds at a later date.

TIMOTHY S. DEMBSKI was previously registered with the following securities firm(s):

09/2011 - 08/2013 MID ATLANTIC CAPITAL CORPORATION (CRD# 10674) - BUFFALO, NY

10/2006 - 03/2011 WALL STREET FINANCIAL GROUP, INC. (CRD# 35830) - HAMBURG, NY

06/1995 - 10/2006 SECURITIES AMERICA, INC. (CRD# 10205) - CHEEKTOWAGA, NY

WALTER F. GRENDA JR was previously registered with the following securities firm(s):

09/2011 - 07/2013 MID ATLANTIC CAPITAL CORPORATION (CRD# 10674) - BUFFALO, NY

10/2006 - 03/2011 WALL STREET FINANCIAL GROUP, INC. (CRD# 35830) - HAMBURG, NY

03/1990 - 09/2006 SECURITIES AMERICA, INC. (CRD# 10205) - CHEEKTOWAGA, NY

11/1989 - 03/1990 ROYAL ALLIANCE ASSOCIATES, INC. (CRD# 23131) - NEW YORK, NY

12/1986 - 11/1989 INTEGRATED RESOURCES EQUITY CORPORATION (CRD# 6403)
05/1985 - 12/1986 WESTMORELAND CAPITAL CORPORATION (CRD# 11469)
12/1983 - 05/1985 APPLE FINANCIAL CORPORATION (CRD# 10375)
03/1983 - 01/1984 DEAN WITTER REYNOLDS INC. (CRD# 7556)
01/1981 - 11/1982 FIRST JERSEY SECURITIES, INC. (CRD# 6621)

If your broker or financial advisor recommended risky hedge funds call Soreide Law Group for a free consultation with an attorney on how to potentially recover your investment losses at: 888-760-6552.