A Florida advisor agreed to settle Securities and Exchange Commission charges that he defrauded 11 investors out of $2.7 million over just four months in 2017, behavior that had already caused him to be barred from the brokerage industry.
Anthony Cottone, 47, of Delray Beach, Fla., settled the SEC’s complaint earlier this week, according to paperwork filed in the U.S. District Court in West Palm Beach.
In the settlement, Cottone agreed to repay all of ill-gotten gains, promised not to violate securities law in the future and is prohibited from publicly denying the charges, a twist on the traditional SEC settlement which allows respondents or plaintiffs to settle without affirming or denying the charges.
According to the SEC, instead of investing customers’ money, Cottone used the funds to pay personal bills, live a lavish lifestyle and fund his various business ventures, including a failed car dealership.
The holding company Botanica Group Holdings, which Cottone operated through his Boca Raton-based Retirement Planning Institute, was also sued by the SEC and agreed to a similar settlement this week.
The website for the Retirement Planning Institute says the company is “permanently closed,” but the company’s Facebook page is still up, billing the entity as “an advocacy group for retirees, specializing in providing financial strategies and investment products.” Photos on the page depict Cottone in an all-white suit on the beach and involved in various charitable endeavors with children.
As part of the scam, Cottone touted his credentials as a certified financial planner to lure people to invest in the sale of preferred interest in a fund he operated, touting a 12% annual return, the SEC said. He never mentioned that his CFP credentials had been revoked in 2020. In fact, the phone number for the now-defunct firm was 855-CFP-Now.
Cottone also failed to disclose to investors that in 2015, he pleaded guilty to a misdemeanor charge in federal court in Pennsylvania for assisting a company sell drugs on the internet to customers without prescriptions.
He was denied securities registration by the state of Florida in 2018 for failing to disclose material facts regarding his conviction, which they discovered after performing a background check, the SEC said.
The CFP Board revoked his CFP certification in March 2020, after Finra barred him in December, 2018 for failing to answer investigators request for information concerning two investor complaints.