By Ashley Lau
Nov 6 (Reuters) - Wall Street's self-regulator has accused
the man involved in one of Broadway's biggest frauds with
stealing or rerouting at least $8.5 million from his brokerage
The charges, listed in a complaint filed Monday by the
Financial Industry Regulatory Authority (FINRA), are the latest
missive against Mark Hotton, a businessman and stockbroker who
was earlier alleged to have fabricated investors to dupe the
producers of "Rebecca: The Musical". The production team later
FINRA's department of enforcement alleged that Hotton, 46,
had stolen at least $5.9 million from his clients since 2006.
The charges, separate from those connected with the musical,
also said Hotton caused at least $2.6 million to be wired from
his clients' brokerage accounts at Oppenheimer Inc to his
outside business activities and other entities and to
individuals with whom Hotton was affiliated.
During that time, Hotton allegedly forged signatures on
letters of authorization, lied on third-party wire request forms
and created fictitious investments, the FINRA complaint said.
"Hotton went so far as to wire funds directly from
customers' brokerage accounts to the accounts of other investors
who were demanding to be repaid," the complaint alleged, noting
that in some instances, he converted funds by persuading his
customers to "invest" in securities that did not exist.
The next step is for the case to be heard by FINRA hearing
officers, something that would typically happen within six to
nine months of the end of an investigation.
A decision on the case would come one to two months after
the hearing. Many enforcement cases, however, settle before the
hearing stage. Discipline could include monetary sanctions and,
potentially lead to Hotton being barred from the securities
Hotton, who left Oppenheimer in 2009, was last registered
with Obsidian Financial Group up until May 2012. He entered the
securities industry in 1993.
Hotton was earlier charged by authorities with two counts of
wire fraud for an alleged financing scheme for the $12 million
"Rebecca" production, and faces up to 20 years in prison for
each count if convicted.
Hotton allegedly had "faked lives, faked companies and even
staged a fake death, pretending that one imaginary investor had
suddenly died of malaria," Manhattan U.S. Attorney Preet Bharara
said in an earlier statement.
Follow us on Twitter @ReutersLegal | Like us on Facebook