- January 29, 2025
- Arete Wealth Management
Arete Wealth Advisers LLC (Arete Advisors), together with Arete Wealth Management LLC (Arete Wealth) is a limited liability company headquartered in Chicago, Illinois. Arete Wealth has been registered with the commission as a broker-dealer since 1998. Arete Advisors has been registered with the commission since 2009 and has over $2.5 billion in regulatory assets under management.
Joey Miller (CRD#: 6175826) is a registered broker and investment advisor with DAI Securities, LLC in New Braunfels, TX.
Jeffrey Larson (CRD#: 4836889) is a registered investment advisor with 25 Financial in Saint Louis, MO, and he is a previously registered broker.
Broker’s History
Joey Miller entered the securities industry in 2013 and previously worked with Ari Financial Services, Inc., Arete Wealth Management, LLC, and Arete Wealth Advisors, LLC.
Jeffrey Larson entered the securities industry in 2004 and previously worked with Securian Financial Services, Inc.; CRI Securities, LLC; Marathon Advisors, Inc.; Financial Network Investment Corporation; Larson Financial Securities, LLC; Larson Financial Group; Arete Wealth Management, LLC; ad Arete Wealth Advisors, LLC.
Allegations of Misconduct
According to publicly available records released by the U.S Securities and Exchange Commission (SEC), in January of 2025 the SEC announced charges against Joey Miller and Jeffrey Larson, formerly dually registered personnel with Arete Wealth Management LLC, a broker-dealer, and Arete Wealth Advisors LLC, an affiliated investment adviser, for fraud, registration violations, and aiding and abetting Arete Wealth Management’s recordkeeping violations. The SEC also charged Arete Wealth Advisors and its Chief Compliance Officer and General Counsel, UnBo (Bob) Chung, with various violations of the federal securities laws related to a coverup of the representatives’ allegedly fraudulent conduct and other compliance failures, and charged Arete Wealth Management with recordkeeping violations.
The SEC’s charges stem from a scheme in which Richard Dale Sterritt, Jr. and six others allegedly defrauded investors through a sham oil-and-gas company, Zona Energy Inc. The complaint alleges that from approximately October 2018 to May 2020, despite the fact that Arete had not approved Zona securities for offer and sale, Miller, Jeff Larson, and Randy Larson sold more than $8 million worth of Zona shares to many of their Arete clients and customers, a practice called “selling away,” which is prohibited by securities laws. The three defendants, as alleged in the complaint, tried to hide the sales by communicating through means not subject to surveillance by Arete, such as through personal phones and email. According to the SEC’s complaint, Miller and Jeff Larson frequently made false and misleading statements to prospective Zona investors and, in return for their fundraising efforts, Sterritt sold them deeply discounted Zona shares.
Financial Advisor Joey Miller was solicited by Michael Sealy, an unregistered broker, who personally invested in Zona and solicited business contacts as prospective Zona investors. Sealy and Miller were acquainted through Miller’s work at Arete. Miller introduced the Zona investment opportunity to his Arete colleague, Larson, who also personally invested in Zona. With Sealy’s knowledge and involvement, Miller and Larson then solicited numerous additional Zona investors, the majority of whom were their clients and customers through Arete. Miller and Larson agreed with Sterritt, Pittman, and Sealy to raise capital for Zona. Miller, Larson, and Zona employees tracked the amount of funds that Miller and Larson raised in order to receive credit for their solicitations and Zona employees shared that information with Sealy. When there was a disagreement between Miller and Larson and Sterritt over the amount of capital that Miller and Larson had agreed to raise, a Zona employee requested in an email that Pittman and Sealy clarify the confusion.
Miller and Larson ultimately raised over $5 million for Zona and were compensated for their fundraising efforts in the form of deeply discounted Zona shares, purchasing Zona shares for as little as $0.04 per share. Without admitting or denying the SEC’s findings, Sealy agreed to cease and desist from violations of Section 15(a) of the Exchange Act, to pay a civil money penalty of $200,000, and to be suspended from participating in an offering of a penny stock for a period of 12 months. For a copy of the cease-and-desist order, click here.
As a result of the SEC’s investigation into the selling away scheme, the SEC seeks permanent injunctions and civil penalties as to all defendants, and additionally seeks conduct-based injunctions, penny stock bars, and officer and director bars against Joey Miller, Jeff Larson, and Randy Larson. For a copy of the SEC litigation release, click here.
For a copy of Joey Miller’s FINRA BrokerCheck, click here.
For a copy of Jeffrey Larsons’s SEC AdvisorInfo, click here.
We Help Investors Recover Investment Losses
Pursuant to FINRA Rule 3270, outside business activities in which Financial Advisors become involved must be disclosed. FINRA Rule 3280 prohibits Financial Advisors from engaging in Private Securities Transactions, which are securities transactions that take place away from the employing brokerage firm. The purpose of these rules is to ensure that Financial Advisors do not engage in selling away. The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.