Subscribe to our mailing list

* indicates required







We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.


Stay Informed with the latest fanancialish news.




Investor Protection

A Couple Cheated Out of Its First Private Investment

April 9, 2020

by Howard Haykin



When You Come to a Fork in the Road, Take It.  – Yogi Berra


A recently married couple reached a fork in the road with their investments. They had experienced losses in the stock market and were now looking to diversify - even into alternative investments, although they were novice investors


An alternative investment is a financial asset that does not fall into one of the conventional stock/bond/money market categories. Private equity or venture capital, hedge funds, real property, commodities, and tangible assets are all examples of alternative investments.


Around that time, the couple came across a private offering for the Rubicon Capital Appreciation Fund, an investment vehicle founded and operated by David Braeger. They decided to ‘take the plunge’ with a $30,000 investment. They wrote the $30,000 check as Braeger instructed and they executed (what they thought was) the official subscription agreement needed for the private placement.


Unbeknownst to them, they had been ‘hoodwinked’ by Braeger. He had them make the check payable to 'Rubicon' rather than to a bank escrow agent. And he had them sign a subscription agreement that was not the actual form that all other investors were signing. Braeger never deposited the couple’s funds as intended, but converted the check for his own personal use. He also never recorded the couple as investors in Rubicon.


Braeger kept the scheme alive for 5 years, until the couple came to realize they had been cheated – at which time they complained to FINRA, the securities regulator. During those 5 years, Braeger kept the couple at bay with written and verbal misrepresentations, such as: (i) he provided fake quarterly statements showing the value and status of their purported investment; and, (ii) he provided false Schedule K-1s for their income tax returns.



WHAT SAFEGUARDS COULD HAVE BEEN TAKEN?    Among the most logical steps these investors could have taken were - - - 
  • Avoided any/all private investments, which are more appropriate for sophisticated and well-diversified investors.
  • Utilized an independent financial watchdog to conduct appropriate due diligence of all ducuments pertaining to the investment fund and its managing member.
  • Searched FINRA BrokerCheck to learn about Braeger's sketchy employment record - 16 firms over 19 years.
  • Contacted Newport Coast Securities, Rubicon's placement agent and the firm where Braeger was registered as a broker and a principal. 
  • Made investment check payable to a bank escrow agent and mailed/delivered it to the placement agent.  



[For further details on Case #2015045456401, click on … FINRA NAC Default Decision, and

FINRA BrokerCheck on David Braeger.]