The Financial Industry Regulatory Authority Inc. has filed a complaint against Dawn Bennett for failing to testify in its investigation of possible fraud tied to her clothing company.
Ms. Bennett didn't show up for testimony on four separate occasions from April to September in violation of the regulator's rules, according to a
Finra complaint released Wednesday. The charges came about a year after the brokerage industry's self-regulatory organization began investigating her for allegedly committing fraud while working at Western International Securities.
In 2015 Ms. Bennett allegedly solicited her employer's clients in a debt deal that purportedly was guaranteed by her retail clothing business at
DJBennett.com. She sold about $6 million of promissory and convertible notes to about 30 investors, many of whom were elderly and included Western's customers, according to the complaint.
Finra found that she may have misappropriated investors' money, committed fraud and engaged in undisclosed outside business activities and private securities transactions. Western permitted Ms. Bennett to resign last November.
“Evidence gathered during the investigation reveals that Bennett may have used investors' money for personal and other expenses unrelated” to her clothing business, Finra said in the complaint.
The Securities and Exchange Commission has already taken action against Ms. Bennett.
The SEC barred her from the securities industry in July for violations that included material misrepresentations about the amount of assets managed by her financial-advice firm, Bennett Group Financial Services.
The ban followed its September 2015 charges that Ms. Bennett grossly inflated the firm's assets and exaggerated investment returns obtained for customers on her
paid radio program "Financial Myth Busting."
