The SEC has banned Massachusetts resident Lee Weiss from the brokerage and investment advisory industry for a fraudulent scheme pertaining to a French company that claimed it could reduce the harmful effects of tobacco smoking. Weiss, of Newton, Massachusetts, and his firm, Family Endowment Partners LLC, will pay roughly $8.4 million in relief to investors he conned, according to the SEC. They will also pay a combined civil penalty of $1.5 million.

The Commission claims that between 2010 and 2012 Weiss and the firm fraudulently advised clients and hedge funds to invest over $40 million in securities issued by companies owned by Biosyntec, which claimed to have developed a cigarette filter that reduced the risk of lung cancer. Weiss also held shares in the French company, which paid him over $600,000 shortly after the investments were made.

The SEC filed its complaint against Weiss in Massachusetts federal court last year alleging he failed to disclose conflicts of interests to client and how their investments were used.

In one instance in 2011, Weiss advised a client to invest $2.5 million in a Biosyntec subsidiary, knowing the money would be used to pay delinquent interest owed to other clients of the firm, the Commission’s complaint states. He also advised customers to purchase $8.25 million in the company’s notes and stock, failing to disclose that the funds would pay financial obligations rather than benefit the company in which they invested. He also failed to disclose the “significant risk” that the notes would never be repaid.

Weiss was previously a registered representative with MIP Global Inc., a broker-dealer based in Puerto Rico, from June 2012 until February 2016, according to the SEC.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.