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Two Former Mid Atlantic Capital Brokers Named in FINRA Complaint Alleging Hedge Fund Fraud

Timothy Dembski, of Lancaster, New York, and Walter Grenda Jr., of Buffalo, New York, were named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that they fraudulently induced customers to invest in a hedge fund, the Prestige Wealth Management Fund, LP.

The FINRA complaint alleges that Timothy Dembski and Walter Grenda Jr. led investors to believe that the Prestige Wealth Management Fund (Prestige Fund) was a growth fund and was based on a computer algorithm, which included risk protections and stop-losses, to limit investor losses in the hedge fund. However, FINRA alleged that the Prestige Fund was a speculative, aggressive investment, was not obligated to follow the computer algorithm, and lost over 80% of its value in its last full month! Mr. Dembski and Mr. Grenda allegedly recommended the Prestige Fund to investors with limited investment experience, who had never invested in hedge funds before, and who used their retirement assets to invest in the fund.

Hedge funds are very sophisticated investments that are typically reserved for high net worth investors with a high risk tolerance. It is a very narrow category of investors who are suitable for these types of investments, and financial advisors and stockbrokers need to be extremely careful about whom they invite to invest in them.

In some cases, as alleged in the FINRA complaint against Mr. Dembski and Mr. Grenda, investors are sold hedge funds as a safe investment based on a specific strategy that would be used (in this case, the computer algorithm). However, if the strategy doesn’t work, investors can be exposed to significant risk and may incur substantial losses.

Have you suffered a financial loss after investing in a hedge fund? Did your broker or advisor fraudulently misrepresent your investment in a hedge fund? If so, call Robert W. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Attorney Robert W. Pearce has a strong track record of success in protecting investors’ rights and holding unscrupulous or negligent hedge fund managers accountable. He has extensive experience with securities litigation, and he has won numerous million and multi-million dollar settlements and awards for his clients.

The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.