Licenses sanctioned for two representatives who sold securities for Madyson Capital Management
DENVER — Colorado Securities Commissioner Gerald Rome announced today that the professional sales representative licenses for Dennis Mitchell Farrah of Aurora and Mark Gregory Raezer of Colorado Springs have been sanctioned, with Dennis Farrah’s license revoked, and Gregory Raezer’s license suspended for 60 days. Farrah is also barred from associating with any licensed securities professional in Colorado. These actions come as part of the fallout from a Division of Securities investigation in Madyson Capital Management and its owner, Joseph David Ryan. Ryan’s companies, collectively known as “Madyson Investments” are the subjects of a court injunction where a receiver has been appointed to control all assets.
The securities sold for Madyson Investments, a group of real estate development companies, were neither registered nor exempt from registration with the Division of Securities, part of the Department of Regulatory Agencies (DORA), and it is alleged that Mr. Ryan, after failing to disclose the intended use of investor money, utilized funds for a variety of personal expenses. The Division contends that Ryan sold securities to at least 78 Colorado residents totaling over $13 million in investments. Many investors redirected money from retirement accounts after being promised high returns with low risk.
In separate stipulations, the Commissioner alleges that Farrah and Raezer, without the knowledge of their employer, Georgia-based Taylor Capital Management, Inc. (TCM), solicited and sold securities on behalf of Ryan and Madyson Investments. Neither representative had the approval of TCM, and did not record the transactions on the company’s books.
“The Madyson case has been particularly devastating to investors considering that so many had utilized retirement funds that are now tied up or gone,” stated Rome. “Sales representatives have an important duty to properly vet investment opportunities for their clients, and well as to accurately disclose risk, and when that does not take place, investors are harmed. So, failure to live up to these requirements can have serious consequences for financial professionals.”
The Orders state that Farrah’s license is permanently revoked, and he is barred from reapplying for Colorado licenses, as well as from association with any licensed broker-dealer, investment adviser, or federally covered adviser that conducts business in Colorado. Raezer’s license is suspended for a period of 60 days.