Update for Victims of Matt Bell

Stoltmann Law Offices is continuing to investigate Matthew A. Bell, a San Antonio stockbroker, who, last year, was indicted on charges of participating in a $300 million stock-manipulation scheme. In 2014, Bell pleaded guilty to two counts of conspiracy to commit securities fraud and conspiracy to commit mail and wire fraud. Bell was initially charged in a 10-count indictment with a group of brokers that included A.J. Discala, the ex-husband of actress Jamie-Lynn Sigler. Discala was accused of allegedly overseen a scheme that involved pumping up the price of penny stocks before dumping their shares, a classic “pump-and-dump” scheme involving four publicly traded companies: CodeSmart Holdings Inc., Cubed Inc., StarStream Entertainment Inc. and The Staffing Group Ltd. A pump-and-dump scheme is a scheme that attempts to boost the price of a stock through recommendations based on false or misleading or greatly exaggerated statements. The perpetrators of the scheme, who already have an established position in the company’s stock, sell their positions after the hype has led to a higher share price. The practice is illegal and is against securities rules and regulations.

In a separate and simultaneous action with the criminal case, the Securities and Exchange Commission (SEC) filed civil charges against Bell and others seeking the return of profits from the alleged scheme and penalties. CodeSmart was suspended from trading last week. Also last week, a Manhattan lawyer and two brokers were arrested in the case. Separately, Bell allegedly recommended share in Palmaz Scientific Inc., a private placement investment. This is commonly referred to as “selling away” and is when a broker recommends a security that is not held or offered by his member firm. It is a tactic used to generate large commissions for the broker himself, and is against securities rules and regulations. Palmaz Securities had been in financial distress when Bell recommended it. Bell allegedly found his investors through the Oak Hills Church, a mega-church on the north side of San Antonio.

Matthew A. Bell was registered with Kercheville & Co. in San Antonio, Texas from August 1998 until April 2001, Prudential Securities Inc. in New York, New York from April 2001 until March 2003, Raymond James & Associates in San Antonio from March 2003 until August 2009, WFG Investments in San Antonio from July 2009 until June 2013 and Securities America in San Antonio from August 2013 until October 2013. According to his Financial Industry Regulatory Authority (FINRA) BrokerCheck report, he has 38 customer disputes against him, 12 of which are currently pending. He also has one civil action against him. He is not licensed within the securities industry.

If you or someone you know lost money with Matthew A. Bell, his former firm, Securities America, could be responsible for investment losses. They had a duty to reasonably supervise him while he was employed there. Because they did not, they can be sued in the FINRA arbitration forum. Please call our securities law offices to speak to an attorney about your options. The call is free with no obligation.

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