As legendary writer Gertrude Stein once declared, “Money is always there, but the pockets change.” This astute observation rings especially true when examining the recent charges filed by the Securities and Exchange Commission against former broker Dennis Butler.
On December 10, 2024, the SEC filed charges against Dennis Butler and a group of other defendants, including Tayt Dencer, Luke Dencer, and their companies Standard Holdings and Standard Huaxia. The SEC alleges these companies defrauded investors “out of millions of dollars, which the Dencers misused and misappropriated to fund their lavish lifestyles.” Butler faces allegations of acting as an unregistered broker in connection with the scheme.
According to the SEC, the scheme unfolded as follows between 2017 and 2023:
- The Dencers and their companies raised over $17 million from at least 40 investors
- They claimed funds would form a company providing streaming content to China via an app
- Instead, they allegedly misappropriated at least $2.8 million
- Misappropriated funds paid for “home leases, luxury cars, designer clothes and jewelry, vacations, gifts for family and girlfriends, and hundreds of thousands of dollars in cash withdrawals”
- The Dencers allegedly “sold investors stock that did not exist” and made “Ponzi-like payments” to investors
As for Butler’s role, the SEC claims he solicited investors to invest at least $2.3 million in the Dencers’ scheme while “improperly” acting as an unregistered broker. He allegedly sold over one million shares of Huaxia Class A common stock to 15 investors in at least 75 transactions, earning “at least $235,700 in transaction-based compensation.”
The SEC has charged Butler with violations of the Exchange Act. In the still-pending charges, they seek “an injunction, disgorgement with prejudgment interest, and a civil penalty” against the New Jersey-based former broker.
Dennis Butler’s Background and Broker History
Dennis Butler launched his career as a broker in 2002 with Ladenburg Capital Management in Bethpage, New York. Over the following years, he worked at firms such as Legend Merchant Group, John Thomas Financial, and Granta Capital Group. His most recent role was with Phoenix Financial in New York City from 2013 to 2019.
According to Butler’s FINRA BrokerCheck profile, he has not registered with any broker-dealer firm since departing Phoenix Financial in 2019. The SEC’s charges state he is currently based in Westwood, New Jersey.
Understanding the Allegations in Plain Terms
To put it simply, the SEC believes Dennis Butler helped raise money from investors for what turned out to be a fraudulent scheme. They say he acted as a broker in these transactions, even though he wasn’t properly registered to do so under financial regulations.
The FINRA Rule allegedly violated here relates to the requirement for brokers to register with the SEC and/or state authorities. By supposedly selling over $2 million in stock without being registered, Butler may have broken securities law, enabling the fraud that cost investors millions.
Investment fraud and bad advice from financial advisors are unfortunately common occurrences. Investopedia reports that in 2020 alone, the SEC ordered fraudsters in investment scams to pay nearly $4.7 billion in penalties and returned roughly $602 million to harmed investors.
Consequences and Lessons for Investors
If the SEC’s charges are proven true, Butler and his associates could face serious penalties, including hefty fines, permanent injunctions, and potentially even criminal charges. Cases like this underscore the importance of thoroughly vetting any investment opportunity and the people promoting them.
As the old adage goes, “If it sounds too good to be true, it probably is.” Be wary of “can’t miss” investments, unregistered individuals selling securities, and always double-check the background of anyone offering financial advice or investment “opportunities.”
The consequences for investors who fall victim to such schemes can be devastating. Not only is there the financial loss itself, but the downstream impacts on retirement plans, college funds, and lifestyles can be irreparable.
Did Butler’s alleged misconduct at Standard Huaxia cost you money? If so, you may be able to recover losses. Call Haselkorn and Thibaut at 1-888-784-3315 for a free consultation about your case. Their experienced team advocates for the victims of broker fraud and has helped recover millions of dollars.
Please note, the foregoing information is based on allegations and publicly available information. All parties are presumed innocent until proven guilty.
