To be honest, as I pen this latest blog entry, there is no joy. Yet, it is not a surprise either. Dan Frishberg, despite his puffery and position – claiming to the “the Money Man” has finally been charged by the SEC for his role in defrauding numerous investors out of millions. Today many now know that what has been claimed about Dan is true. He has not acted in the best interest of his clients and as a result – one of the outcomes is that Dan “The Money Man” Frishberg is barred from association with any investment adviser or certain other registered entities.
The SEC News Release reads as follows in its entirety:
Washington, D.C., March 25, 2011 — The Securities and Exchange Commission today charged Houston-area businessman Daniel Frishberg with fraudulent conduct in connection with promissory note offerings made to clients of his investment advisory firm.
The SEC alleges that Frishberg’s firm Daniel Frishberg Financial Services (DFFS) advised clients to invest in notes issued by Business Radio Networks (BizRadio), a media company founded by Frishberg where he hosts his own show under the nickname “The MoneyMan.” Frishberg failed to tell his clients about BizRadio’s poor financial condition or his significant conflicts of interest with the note offerings that helped fund his salary at BizRadio.
Frishberg agreed to settle the SEC’s charges by paying a $65,000 penalty that will be distributed to harmed investors. He will be barred from future association with any investment adviser.
“Contrary to his obligations as an investment adviser, Frishberg approved risky investment recommendations to his clients without ensuring that the risks and conflicts were properly disclosed,” said Rose Romero, Director of the SEC’s Fort Worth Regional Office. “Frishberg personally benefitted from the questionable investments that were recommended to his clients.”
According to the SEC’s complaint filed in federal district court in Houston, at least $11 million in promissory notes were issued by BizRadio and Kaleta Capital Management (KCM), which is owned by Frishberg’s associate Albert Fase Kaleta. Frishberg and Kaleta jointly controlled BizRadio.
The SEC charged Kaleta and his firm with fraud in 2009, and the court appointed a receiver to marshal the assets of KCM and relief defendants BizRadio and DFFS.
The SEC alleges that Frishberg authorized Kaleta to recommend the notes to DFFS clients, and clients were not provided with critical disclosures. Investors were not told of BizRadio’s poor financial condition and the likely inability of KCM and BizRadio to repay the notes. Nor were investors informed about Frishberg’s significant conflicts of interest in the note offerings because the proceeds funded his salary as a BizRadio talk show host.
The SEC alleges that Frishberg chose Kaleta to recommend the BizRadio notes even though he was aware of complaints about Kaleta’s lack of truthfulness in sales presentations regarding other investments.
The SEC’s complaint alleges that Frishberg violated Section 206(2) of the Investment Advisers Act of 1940 and aided and abetted violations of Sections 206(1) and 206(2) of the Advisers Act.
Without admitting or denying the SEC’s allegations, Frishberg consented to the entry of a permanent injunction against these violations and to pay a $65,000 penalty. Frishberg consented to the establishment of a fair fund for the distribution of his penalty to harmed investors, and agreed to be barred from association with any investment adviser or certain other registered entities.
# # #
For more information about this enforcement action, contact:
Rose Romero
Regional Director, SEC’s Fort Worth Regional Office
(817) 978-3821Stephen J. Korotash
Associate Regional Director, SEC’s Fort Worth Regional Office
(817) 978-6490
WHAT DOES THIS MEAN?
Well for starters…those who lost a whole bunch of money and thought they might get it back…well think again. Dan’s $65,000 penalty is a small price to pay for the $11 million fraud. To be clear, I have not had any inside information, but I suspect that Dan’s out of money otherwise I suspect the SEC would have exacted a larger fine as part of their role is to protect the public. Oh well…
CRIMINAL INDICTMENT ON THE HORIZON?
Rose Romero, Director of the SEC’s Fort Worth Regional Office stated, “Frishberg personally benefited from the questionable investments that were recommended to his clients.” So does this mean that he could be the target of a criminal indictment?
So we are all clear, the SEC has NO CRIMINAL enforcement authority – only civil. Therefore the actions of the SEC are likely the best they could get under the circumstances. Effectively they squeezed blood out of the turnip and barred Dan from any role as an investment advisor. Now regarding criminal…well, as I’m told the statue of limitations is longer for any criminal issues, so I suspect that the US Attorney, FBI or others may still be looking into this case and (my opinion here) it might hinge on what Dan does next. For example, if Dan were to “man up” and quit his radio show where he is still huffing and puffing about his wisdom…he might avoid more consequences. On the other hand…should he stay on the radio and continue his advice (although who would want to listen)…then there might be more interest in criminal charges.
My guess is that if there are enough folks who have been harmed by the talented Mr. Frishberg who complain to the US Attorney or FBI, perhaps law enforcement will find the wisdom and logic to continue to investigate Dan Frishberg and extract consequences more fitting with his crime (that he did not admit).
PUBLICITY
One thing that Dan Frishberg liked is publicity…in fact, it seemed he craved it. Well, he’s getting what he liked as he’s being reported on in the Wall Street 
Journal and other major news outlets. Wonder, and I’ve got to ask, if Maria Bartiromo is going to interview Dan “The Money Man” again…or if she has finally figured out that is was all smoke and mirrors?
WANT YOUR VOICE HEARD?
If you feel that your voice needs to be heard here are two US Attorney’s that could be contacted – one in the Southern District of Texas (Houston Area) and one in the Northern (Dallas). I suspect the Houston US Attorney is the one who would have the most interest, but since the SEC in Fort Worth brought the charges…I’m providing both.
José Angel Moreno, US Attorney Houston
P.O. Box 61129
Houston, TX 77208
(713)567-9000
James T. Jacks, US Attorney Dallas
1100 Commerce Street, Third Floor
Dallas, TX 75242-1699
(214)659-8600
SHARE YOUR VOICE –
WHAT DO YOU THINK ABOUT THIS SEC OUTCOME?
Motivational Speaker - Chuck Gallagher Business Ethics and Choices Expert 
Sad day for all the cheated investors. But I don’t think anyone is surprised. He’s getting off cheap if you ask me. He should be locked up in prison with Madoff and Stanford. Why isn’t he in prison?
I really appreciate you keeping us informed as we who live long distance have no way of knowing. I was beginning to think this was all just” swept under the rug” I am getting closer to the need for assisted living and had thought I had money enough to stay comfortable. Hope the punishment fits the crime.
My heart goes out to you Grandma! Having worked for those crooks, it broke my heart every time I saw someone come in being led to “slaughter”. Looks like Dan found out how to make crime pay…he steals $11M (quite frankly, the figure is higher)of other people’s money for his own gain and only has to pay $65K. I truly hope this is only the first shoe to drop. Both Frishberg and his manipulating wife should pay.
We invested the money for our grandchild’s college (6 figures) and have nothing but reams of paper left to show for it. Frankly, since he introduced us to Stanford, we should have gotten the clue earlier. As many know, the signs were all there but as he sat in his corner office with his gold statues and thousand dollar suits, he claimed he just didn’t have the cash to return when we asked repeatedly. Dan, you’re the man alright…the man with the scam.
Per receiver, he’s still working on several avenues of monies that “others” owe KCM. Some we know very well who they are. Also he will seek to recover add’l funds from Frishberg in addition to the small penalty he paid. So lets all keep the faith. If I am not made whole, I will pester whatever criminal agency to make sure they all end up behind bars.
Just when you thought it was safe to go back out into the once shark infested waters rumors surface that the sharks had babies. Apparently Al Kaleta’s Son is now in the financial services business being coached by his Dad. Someone needs to check his Son’s criminal record while he was in college and post it.
Fishburp’s wife, the “unattractive” Elisea now has (or is getting) her licenses to sell financial products of services, and supposedly they are moving to Florida to scam folks there. If you ask me, she is the reason both Kaleta and Fishburp are in all this trouble.
Seeing how Al and Dan are NOT to have dealings with financial advisers….the SEC might find these developments interesting. Can you imagine sitting across from Elisea and discussing your financial future???? Last I knew, She and Dan couldn’t even get a credit card in their name. And yes…Cole Kaleta is an interesting read. Quite a rap sheet! They may be in for some surprises in Miami…..just so happens, it’s my hometown!
BTW…you are right about Elisea. she is the greed behind it all.
I am surprised that anyone with even traces of ethics worked for these guys. Its amusing to read from ex-employees “things they saw but did not do anything about”.
Touche Rippedoff! Everyone worked there for the paycheck and by the time we really knew what was going on, it was too late. I can assure you I have revealed all and anything I knew or suspected to the proper people.
Not so sure that people like Falconer, Sonia, etc did not know. I think they did not care, perfect boiler room employees.
They miss the “gravy” lifestyle and are dying to get back in it, at all cost.
Radio station will be auctioned off to highest bidder in May. anyone interested in knowing how badly investors got cheated, just go to http://kcmreceivership.com/index.html
Kaleta is being chased by American Express in Fort Bend County. Just go to their website its all there, along with his son’s shinanigans. Well, here is the website just to make easier on everyone http://tylerpaw.co.fort-bend.tx.us/default.aspx
Indeed, there were employees that knew what was going on, but many who didn’t. I can say that when I worked there from ’05 to ’07 everyone knew that Kaleta was a con-man and Frishberg knew less than he led on – but could talk his way out of an excecution. But, few knew of shady deals. By the way, since BizRadio wasn’t monitored for listenership (how many people were listening) I analyzed website traffic (including podcast downloads) to determine trends and found out that only approx 300+ people were listening regularly; less than 10 people listened to streaming live audio, Del Walmsly was the most listened to, with Frishberg about halfway down the list. When I brought this to the attention of the CFO, Al Kaleta said they were closing my position but wanted me be the manager of their upcoming “trading academy”. I laughed. Then I quit.
If this crook is barred how come he is doing investment seminars?
http://themoneymanreport.com/newsletters-a-reports/item/604-join-us-for-a-free-strategy-session.html
And he has some of his old cohorts like Sonia working with him, sponsored by Barrington Financial. On to another scam and new suckers.
From what I am told, Once the SEC files the order (which is supposed to be very soon)then DF will be prohibited from joining or working for any financial firms, including Barrington. He is also not permitted to deny any of the SEC charges brought against him.
I looked up Barrington Financial in regards to Biz-Free’s comment and noticed that it is the same San Antonio address (13750 San Pedro, Suite 800) as Frishbergs San Antonio office (13750 San Pedro, Suite 880). I also noticed that he has bought a bunch of web names … danielfrishberg.com; danielfrishberg.net; danielfrishbergtv.com; danielfrishbergsocialmedia.com; etc. Also, it is interesting to note that his moneyman website makes you pay to be a part of his “inner circle”. This is that same kind of scam that his “hero” Dan Kennedy uses to scam people. P.S. I met Dan Kennedy when Dan Frishberg invited him to BizRadio. We all held our breath when Dan Frishberg was willing to offer him a large piece of BizRadio to work with him. Luckily, Dan Kennedy declined. Weird huh?
Wow, thank you for the website. What a scam! Financial Scam is worse than any other crimes. These people should be made known to EVERYBODY in the world. Just a wild thought: there should be a website to list all these criminals to warn people not to invest with them. Why is he still doing his show? Is his show still airing somewhere in USA? Better stop him. BTW he should be in jail now.
He’s back to work in the Miami area now.
Oh yea…been there for a while with his wife leading the charge. Looks like he might have sold to someone else as I’m getting info for seminars from another dude.