Our Law Firm is investigating FINRA broker-dealer Mercator Associates relating to the supervision of former Mercator broker Yaman Sencan (“Sencan”) who allegedly was a part of a Ponzi Scheme which involved investments in Ramco & Associates and Westover Energy Trading Partners. Sencan was indicted by the U.S. Attorney’s Office earlier this year for conspiracy, securities fraud and wire fraud, along with three other defendants: Stephen Merry, who was living in Fallbrook, California, when he formed Westover Energy Trading Partners in New York in 2008, Timothy Durkin, then a New York resident, who was Westover’s managing partner and one of the principal investors, and David Petersen, who was living in Omaha, Nebraska in March 2010 when he served as a trustee and accountant of Ramco & Associates.
The defendants allegedly promised a steady stream of profits at little or no risk by using a sophisticated computer program to take advantage of temporary price differences among different stock markets, according to the indictment. Specifically, the indictment said,
From in or about October 2009, through the date of the return of this Indictment, Sencan, Petersen, Merry and Durkin, aided and abetted by each other, perpetrated a scheme to defraud Ramco / Westover investors across the United States, and in Mobile and Baldwin County, Alabama in particular, by accepting millions of dollars of investor funds under false pretenses, failing to invest the funds as promised and creating and disseminating false documents to investors purporting to show that their funds had been invested and that they were recognizing continual profits on their investments. To execute the scheme, Sencan, Petersen, Merry and Durkin, aided and abetted by each other, solicited, and caused others to solicit, potential investors to invest funds in Ramco / Westover based upon, among other things, a promise to use investor funds in a proprietary investment system, and representations that the investments would achieve continual growth with little or no risk. However, contrary to representations made on weekly account statements sent to investors, the defendants did not invest the funds as promised. Further, the defendants misappropriated investor funds and converted those funds to their own personal use and the use of others…Without fail, the statements falsely reflected that all investors consistently made profits, albeit sometimes minimal, every week regardless of whether there was a downturn in the market.
Prosecutors also allege that the defendants touted Arthur Cohen, a New York billionaire real estate investor, as being a principal investor in Westover. However, the indictment says, although Cohen had a previous business relationship with Durkin, he was not involved in Westover in any capacity. Prosecutors seek a monetary judgment of over $4.9 million, which the indictment states is the total amount of money invested in Ramco and Westover.
From June 2004 to January 2010, Sencan was registered with FINRA broker-dealer Mercator. Under FINRA Rules, Mercator was obligated to properly supervise the activities of Sencan during the time he was registered with the brokerage firm. Accordingly, Mercator may be liable for failing to supervise Sencan’s activities while registered at the firm.
If you have information relating to this investigation, please contact Steven D. Toskes, Esquire or Jahan K. Manasseh, Esquire of KlaymanToskes, at 888-997-9956.