The SEC Enforcement division shut down an allegedly bogus operation run by John Bivona based in New Jersey. Bivona, via Saddle River Advisors and SRA Management Associates, raised money from unsuspecting investors promising access to pre-IPO tech companies in the San Francisco bay area. According to the SEC, this was not exactly the case as Bivona used the funds to pay off earlier investors in a pyramid scheme while using some of the cash to pay credit card bills, cover a mortgage for a home on the Jersey Shore, a car loan and more. While the SEC states Bivona stole $5.7 million he raised over $53 million. The bulk of the money went to his relative Frank Mazzola – another upstanding character who was previously barred from the securities industry in an earlier enforcement action. Mazzola was nabbed regarding fraudulent acts surrounding pre-IPO shares of Facebook along with shares in Zynga and Twitter. Mazzola’s uncle John was also a partner in Frank’s misadventure in securities fraud.
Jina Choi from the SEC’s office in San Francisco said of the case;
“We allege that Bivona preyed on investors seeking to invest in popular pre-IPO technology companies and hid the scheme by avoiding outside reviews of the funds and depriving investors of financial statements despite promises to do so.”
The SEC obtained a court order to freeze the assets of Mazzola and his wife along with expected disgorgement of funds from Bivona, Mazzola and their dubious firms.
The SEC has been more vocal about securities fraud in recent months. This may be in part to the changes in securities law under the JOBS Act that make general solicitation for certain Reg D private placements an option and the forthcoming TitleIII / Reg CF exemption.