The SEC accused a Florida-based registered advisor of running a $17 million fraud scheme on 40 clients, preying on Venezuelan nationals, Catholic dioceses and elderly victims.
According to the SEC complaint filed Wednesday, Andrew Jacobus’ scheme ran for nearly nine years, with the advisor raising about $39.7 million from advisory clients through his companies Kronus Financial Corporation and Finser International Corporation.
Jacobus first registered Finser with the commission in 2010, offering advisory services to clients of a currency exchange provider he ran in Venezuela. The SEC previously settled charges with Jacobus in 2020, accusing him of charging “exorbitant” performance fees against funds he managed. Jacobus agreed to monetary penalties totaling more than $61,000 and a cease-and-desist mandate.
From May 2015 through April 2024, Jacobus directed clients to deposit money in U.S. bank and brokerage accounts held in his name, promising to invest their money (with trading authorization). He operated his business through Finser (and later Kronus).
According to the commission, Jacobus told clients they’d invested in securities, including selling limited partnership interests in the “Corfiser SIMI Fund.” Jacobus falsely told clients he’d invest their money in that fund (which purportedly invested in IPOs). Jacobus lied to investors about promised returns and the fund’s performance.
Instead, Jacobus would deposit the money and then use the funds to invest in securities for his benefit, repay loans, and fund personal expenses (including Jacobus’s mortgage, property taxes, real estate purchases, travel, and luxury vehicles).
During this period, Jacobus would urge clients to open brokerage accounts. When they inquired about account holdings and balances, Jacobus would send statements doctored to look like they were from the broker/dealer.
Over $17 million of clients’ funds were used on various luxuries, while about $7.8 million paid off existing investors in a Ponzi-like fashion. According to the commission, Jacobus stole about $3.2 million from Catholic Church clergy and dioceses in Venezuela, among other victims.
According to the Miami Herald, in 2023, several affluent Venezuelan citizens sued Jacobus, accusing him of fraud and civil theft after he withheld their money amid demands that he return it. His victims included “a renowned sculptor, a plastic surgeon, and a wealthy businessman who owns a crane business, all from Venezuela.”
By 2021, when Jacobus stopped paying some clients altogether, he made excuses to clients, including “liquidity issues and regulatory restrictions” (and made partial payments to some investors). According to the commission, clients also received emails purportedly from Kronus’ offshore law firm saying account closure requests wouldn’t be honored for a year.
“In fact, the law firm had not sent the email, and it had never used the particular email address from which the emails were sent,” the complaint read. “The domain name used in the purported offshore law firm’s emails was registered to Jacobus.”
As of press time, Jacobus could not be reached for comment. The SEC is seeking permanent injunctions, disgorgement and civil monetary penalties.