Arete Wealth Management LLC, Arete Wealth Advisors LLC, Zona Energy Inc.

At ChapmanAlbin LLC, we are committed to uncovering investment fraud and protecting investors from misconduct. The Securities and Exchange Commission (SEC) has recently filed charges against Arete Wealth Management LLC, Arete Wealth Advisors LLC, and several executives for their involvement in an illegal securities offering linked to a fraudulent oil-and-gas company, Zona Energy Inc.

Overview of the Allegations

The SEC’s complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges that from October 2018 to May 2020, Joey Miller, Jeff Larson, and Randy Larson—who were registered with Arete Wealth Management—illegally sold over $8 million worth of Zona Energy shares to their clients without proper approval from Arete. This practice, known as “selling away,” is prohibited under securities laws and was intentionally concealed through personal emails and phone calls.

Additionally, Miller and Jeff Larson misled investors about the Zona investment’s legitimacy, and in exchange for their fraudulent sales efforts, they received deeply discounted Zona shares from the scheme’s mastermind, Richard Dale Sterritt, Jr.

Cover-Up and Compliance Failures

When UnBo (Bob) Chung, Chief Compliance Officer and General Counsel of Arete Wealth Advisors, and other executives became aware of the misconduct, they attempted to cover it up rather than reporting it. Chung and Arete forced the brokers to obtain settlement agreements from more than 100 defrauded clients, which:

• Released Arete from liability for the fraudulent Zona sales.
• Contained false and misleading statements that further deceived victims.
• Included an illegal liability disclaimer, misleading clients into believing they had waived their legal rights to recover losses.

Despite his key role in the firm’s compliance, Chung later claimed he had not read the agreements—a serious breach of his fiduciary responsibilities.

SEC Charges and Legal Consequences

The SEC has filed multiple charges against the involved parties:

• Miller, Jeff Larson, and Randy Larson: Fraud and aiding and abetting Arete’s violations.
• Arete Wealth Advisors: Violations of the Investment Advisers Act of 1940 related to fraud and compliance failures.
• Arete Wealth Management: Recordkeeping violations under the Securities Exchange Act of 1934.
• UnBo Chung: Aiding and abetting fraud by both Arete Wealth Advisors and its representatives.

The SEC seeks:

• Permanent injunctions against all defendants.
• Civil penalties to deter future violations.
• Penny stock bars, officer, and director bans against Miller, Jeff Larson, and Randy Larson.

Additionally, Michael Sealy, an unregistered broker, has settled SEC charges for selling Zona shares and agreed to pay a $200,000 penalty and serve a 12-month suspension from penny stock offerings.

What Investors Need to Know

This case serves as a critical reminder for investors to:

• Verify investment approvals: Ensure that securities are properly vetted by your financial adviser’s firm.
• Be cautious of off-the-books deals: Unauthorized sales, especially those using private emails and phone calls, are red flags.
• Read all settlement agreements carefully: Ensure you are not unknowingly waiving your rights.

ChapmanAlbin Can Help

If you or someone you know invested in Zona Energy Inc. through Arete Wealth Management, Arete Wealth Advisors, or its representatives and suffered financial losses, you may be eligible to recover your funds.

At ChapmanAlbin LLC, we specialize in investor fraud cases and are ready to help you navigate your legal options.

Contact us today for a free consultation, and stay informed by visiting our website for the latest investor alerts. We are committed to holding bad actors accountable and protecting investor rights.