Investors Sue Financial Firm for Not Vetting Ticket Reseller Involved in HAMILTON Ponzi Scheme

By: Feb. 06, 2017
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Last month, two New York city men were charged with fraud by the SEC for running a Ponzi scheme with money raised from investors to fund businesses purportedly created to purchase and resell tickets to such high-demand shows as the Broadway musical HAMILTON.

Now, attorneys representing a group of investors have filed a lawsuit in Manhattan federal court alleging a New York investment firm failed to properly vet the financial health and business practices of Joseph Meli and Matthew Harriton and their four purported ticket reselling businesses - Advance Entertainment, Advance Entertainment II, 875 Holdings, and 127 Holdings - involved in the Hamilton Ponzi scheme.

Lawyers David Pfeffer and Richard Schoenstein of Tarter Krinsky & Drogin LLP have filed suit in New York's Southern District against Tripoint Global Equities and Tripoint Capital Advisors over their actions, stemming from the private offering of a ticket reseller business formed last fall.

The complaint (which you can read in full below) alleges that Tripoint misled investors in claiming it had conducted an adequate investigation into the operations and finances of the ticket company, which was ostensibly formed to purchase and resell large blocks of tickets for Broadway shows and concerts but whose principals instead have been charged with running a Ponzi scheme that allegedly syphoned more than $80 million to pay themselves and other investors. The principals of the reseller operation have been charged with criminal conspiracy, securities and wire fraud.

"Instead of undertaking a reasonable due diligence review and investigation of the defendants' business plan to resell thousands of tickets of major concerts and Broadway shows, Tripoint instead focused on seizing its own commissions and continued to persuade our clients - and others - to invest more money into the reseller's Ponzi scheme, what has quickly become known as Hamilcon," said Pfeffer and Schoenstein.

On January 27, 2017, the United States and the SEC filed actions contending that $81 million was raised from over a 100 investors for investment in a ticket reselling enterprise including the Broadway musical Hamilton.

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