On March 9, 2018, it was announced that the founder and president of the Wealth Research Institute, a purported investment research firm, had been convicted on three counts of securities fraud, investment adviser fraud and wire fraud. 77-year-old Louis F. Petrossi was convicted following a four-day trial. Evidence at trial showed that Petrossi falsely claimed to investors that money they invested in purported investment funds, Cadwicke Ventures LLC and Chadwicke Partners LLC, would be used to invest in startup companies.
Instead, Petrossi used the money to pay for personal expenses. He also issued fraudulent statements that overstated the cost and values of the securities held by the investment funds. Evidence showed that between January of 2015 and January of 2017, the defendant solicited more than $1.8 million in investments in Chadwicke Partners from more than 25 investors. The defendant promoted Chadwicke as providing investors with the opportunity to invest in several high-profile startups, including Lyft, Maplebear, Pinterest, Spotify Technology, and Palantir Technologies.
The defendant invested roughly $665,400 in privately held startup companies. More than $1.1 million was used to pay personal expenses. Around August of 2016, the defendant sent emails to Chadwicke investors with a spreadsheet, which contained false and misleading statements about the purchase price and value of securities held by the funds. Petrossi was arrested in Nevada on May 3, 2016.
At the time of sentencing, Petrossi will face a maximum sentence of 20 years. The defendant was also convicted in May of 2017 for his involvement in the ForceField Energy Inc. market manipulating scheme. Additional details have been made available here.