Originally Syndicated on October 2, 2024 @ 8:41 am
Daniel Mackle, owner of Silver Edge Financial LLC, has been barred by the Securities and Exchange Commission (SEC) from serving as a stockbroker or investment advisor. This action follows findings that Mackle and his company operated as unregistered brokers while marketing and selling interests in the Silver Edge Funds, a series of investment vehicles focusing on pre-IPO companies. This decision was formalized in the SEC’s Administrative Proceeding File No. 3-21325 on March 3, 2023.
As a result of the SEC’s ruling, Daniel Mackle and Silver Edge Financial LLC are prohibited from engaging in any securities-related activities, including soliciting investments or providing financial advice. The SEC’s investigation revealed that Mackle and his company misled investors about the risks associated with the Silver Edge Funds and failed to disclose material information about the investments.
In addition to the ban on serving as a stockbroker or investment advisor, Mackle and Silver Edge Financial LLC have been ordered to pay disgorgement of ill-gotten gains and civil penalties. This enforcement action underscores the importance of transparency and compliance in the financial industry, and serves as a warning to other individuals and companies engaging in similar unlawful practices.
Daniel Mackle: Background
Daniel Mackle is a former financial advisor and the owner of Silver Edge Financial LLC, a firm recently barred by the SEC for unregistered broker-dealer activities. On March 3, 2023, the SEC issued a cease-and-desist order against Mackle, citing that he raised over $65 million from investors for pre-IPO securities without the necessary registration.
The SEC found that Daniel Mackle managed all operations at Silver Edge Financial and actively solicited investments, violating Section 15(a) of the Securities Exchange Act of 1934. His actions, along with past allegations of misconduct in prior roles, underscore the critical importance of regulatory compliance in the financial sector.
Daniel Mackle has a history in the financial industry, marked by both business ventures and regulatory scrutiny. He is the founder and owner of Silver Edge Financial LLC, established in December 2018. Mackle managed all operations of the firm, which focused on marketing and selling interests in pre-IPO funds. Under his leadership, Silver Edge raised over $65 million from investors without registering with the SEC, leading to significant legal consequences.
Prior to founding Silver Edge Financial, Daniel Mackle was registered with several broker-dealers, including Garden State Securities Inc. and MD Global Partners. His tenure at these firms included multiple customer-initiated disputes, with allegations ranging from mismanagement and unauthorized trading to unsuitable investment recommendations. These past issues contributed to the scrutiny he faced from regulatory authorities.
In March 2023, the SEC took action against Mackle, barring him from the securities industry for violations related to unregistered broker-dealer activities. This case highlights the importance of regulatory compliance and the responsibilities that come with handling investor funds and securities.
Silver Edge Financial: Overview
Daniel Mackle established Silver Edge Financial LLC in December 2018 and managed all its operations. The SEC’s order indicates that Daniel Mackle was instrumental in creating the Silver Edge Funds, hiring sales representatives to promote the funds to accredited investors. From 2019 onward, Mackle and his team raised over $65 million from investors by selling interests in funds that contained shares of companies planning to go public or aiming for liquidity events within five years.
The SEC found that Daniel Mackle not only provided his sales team with lists of potential accredited investors for cold calling but also furnished detailed investment documentation and followed up on potential opportunities. Despite the substantial funds raised, neither Daniel Mackle nor Silver Edge was registered with the SEC, violating Section 15(a) of the Securities Exchange Act of 1934.
Financial Penalties and Past Disputes
Daniel Mackle’s activities have not gone without scrutiny. According to FINRA Public Disclosure, he has been involved in multiple customer-initiated investment disputes:
- February 6, 2002: A customer complaint was settled for $20,000 due to allegations of mismanagement of investment accounts while Mackle was with Barron Chase Securities Inc..
- July 29, 2021: A customer filed a claim for $550,000, alleging unauthorized and excessive trading, misrepresentations, and failure to supervise registered representatives related to over-the-counter equities while at Garden State Securities Inc. (FINRA Arbitration No. 21-01590).
- April 25, 2022: Another arbitration claim requested $1.8 million in damages, claiming unsuitable recommendations, account churning, and breaches of fiduciary duty during transactions at Garden State Securities Inc. (FINRA Arbitration No. 22-00611).
Daniel Mackle’s registration with Garden State Securities was terminated on March 6, 2019.
The Securities and Exchange Commission (SEC) has taken significant enforcement actions against Daniel Mackle and his firm, Silver Edge Financial LLC, for engaging in unregistered broker-dealer activities related to the sale of pre-IPO securities. This action highlights the importance of regulatory compliance in the financial industry, particularly in the context of emerging investment opportunities.
Overview of the Violations
On March 3, 2023, the SEC issued a cease-and-desist order against Daniel Mackle and Silver Edge Financial, revealing that they raised over $65 million from investors without proper registration. The SEC found that Daniel Mackle managed all operations at Silver Edge Financial, which was formed in December 2018 to sell interests in various pre-IPO funds. Despite handling substantial transactions, neither Mackle nor Silver Edge registered with the SEC, violating Section 15(a) of the Securities Exchange Act of 1934.
Daniel Mackle and his team solicited investments from accredited investors, providing them with documentation and follow-ups on investment opportunities. The SEC’s findings further indicated that the firm charged significant fees, including a 4% management fee, a 3% administrative fee, and a 10% placement agent fee.
Key Findings of the SEC’s Orders
The SEC discovered that EAC purchased over 14 million shares of pre-IPO companies and sold more than $13.4 million worth of these shares to different pre-IPO funds. The firm also retained a significant portion of the shares in inventory. The SEC emphasized the importance of registration for broker-dealers, stating that compliance ensures regulatory oversight, including inspections and proper record-keeping.
Carolyn M. Welshhans, Associate Director of the SEC’s Enforcement Division, remarked, “Individuals and entities in the pre-IPO space, including dealers, must comply with the SEC’s registration provisions when selling securities backed by pre-IPO shares and cannot avoid essential regulatory oversight.”
The SEC’s orders determined that EAC, Carsten Klein, Daniel Mackle, Silver Edge Financial, and six salespeople violated Section 15(a) of the Securities Exchange Act of 1934. While the respondents did not admit or deny the findings, they agreed to cease and desist from further violations.
Broader Implications for EAC and Other Parties
In a related case, the SEC also took action against EAC and its founder, Carsten Klein, for similar violations. EAC purchased over 14 million shares of pre-IPO companies and sold more than $13.4 million worth of shares to various funds, including those managed by Silver Edge. The SEC emphasized that compliance with registration requirements is crucial to maintain regulatory oversight and protect investors.
Mackle, Klein, Silver Edge, and the associated sales representatives all faced penalties. Mackle and Silver Edge agreed to pay more than $2.5 million in disgorgement and prejudgment interest, alongside a civil penalty of $975,000. They also accepted industry and penny stock bars, with the option to reapply after five years. Klein and EAC agreed to similar financial penalties, reinforcing the importance of compliance in the securities industry.
Past Disputes and Regulatory Consequences
Daniel Mackle’s history also includes multiple customer-initiated disputes while associated with other broker-dealers, including allegations of mismanagement, unauthorized trading, and unsuitable recommendations. These past incidents underscore the significant risks associated with unregistered activities in the securities market.
The SEC’s actions against Mackle and Silver Edge Financial serve as a critical reminder of the regulatory framework that governs the sale of pre-IPO securities. As the agency continues to enforce compliance, it highlights the need for all brokers and dealers to adhere to registration provisions, ensuring investor protection and market integrity.
Implications for Investors of Silver Edge Financial
The SEC’s action against Mackle serves as a stark reminder of the importance of regulatory compliance in the financial industry. Investors who may have suffered losses while working with Mackle or Silver Edge Financial LLC should be aware of their rights. They might have grounds to pursue claims against brokerage firms that failed to supervise these unregistered activities.
For those affected, seeking legal counsel can be an important step in exploring potential recovery options. Investors are encouraged to stay vigilant and conduct thorough due diligence when dealing with investment opportunities.
Conclusion
The enforcement actions against Daniel Mackle and Silver Edge Financial signal the SEC’s commitment to upholding the regulatory standards necessary for a fair and transparent financial marketplace. Investors and industry participants are encouraged to remain vigilant, conduct thorough due diligence, and seek legal counsel if they have been affected by the actions of unregistered brokers. The implications of these rulings are significant for all parties involved, reinforcing the necessity of regulatory compliance in the rapidly evolving world of pre-IPO investments.These enforcement actions serve as a warning to those who may be tempted to engage in fraudulent activities within the financial industry.
It is crucial for investors to protect themselves by thoroughly researching any potential investment opportunities and ensuring that they are dealing with registered and trustworthy brokers. By holding individuals and firms like Daniel Mackle and Silver Edge Financial accountable for their actions, the SEC is working to maintain integrity and trust in the financial markets, ultimately benefiting all stakeholders involved. Compliance with regulations is not just a legal requirement, but a crucial component in safeguarding the interests of investors and maintaining the overall stability of the financial system.
