Broker Sentenced for Fraud; Investors Could Recover Losses

by InvestorLawyers on April 19, 2012

in Arbitration,FINRA,North Carolina,Securities Fraud,Unregistered Securities

Former securities broker Gregory Bartko has been found guilty of fraud and sentenced to 23 years in prison. Allegedly, Bartko defrauded 200 investors in a scheme that took $3.3 million from his clients. Bartko’s sentencing took place April 4 in the Federal District Court in Raleigh, North Carolina. According to stock fraud lawyers, Bartko’s victims may be able to recover losses through a Financial Industry Regulatory Authority (FINRA) arbitration claim.

Broker Sentenced for Fraud, Investors Could Recover Losses

Together with Scott Hollenbeck, Bartko’s fraud took place through the sale of unregistered securities. Hollenbeck, a Kernersville, North Carolina resident, was a member of Gospel Light Baptist Church and used his religions connection to target church members. Hollenbeck made false promises of 12 to 14 percent guaranteed interest rates through a fund that was owned by Bartko, the Caledonia Fund.

In April 2004, North Carolina’s secretary of state’s office issued a cease and desist order. Despite the order, Hollenbeck and Bartko continued to raise money for another fund developed by Bartko, the Capstone Fund. According to stock fraud lawyers, the money raised from investors was used for Hollenbeck’s and Bartko’s personal use.

In some cases, a financial firm can still be liable for investor losses if it was negligent in its supervision of a broker, even if the broker or financial adviser is conducting business without the firm’s knowledge. As a result, investment fraud lawyers are investigating what liability Bartko’s employers might have for his actions. If it can be proven that the FINRA broker-dealers Bartko worked for did not have adequate supervisory policies and procedures in place, Bartko’s victims could recover losses from his employer.

If you were a victim of the fraud committed by Bartko or Hollenbeck, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact an investment fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Previous post:

Next post: