Rockland fund manager concedes $3.5M SEC sanctions

Rockland County investment manager Daniel J. Mackle Sr. and his Silver Edge Financial LLC have agreed to pay nearly $3.5 million to the U.S. Securities and Exchange Commission for operating as an unregistered broker-dealer.

Beginning in 2019, Mackle raised more than $65 million by selling funds that held shares in private companies he expected to go public within a few years.

The idea was to buy shares before companies are publicly trades, when prices are cheaper, and profit when share prices increase after the initial public offerings.

“As an investor it would be silly not to take advantage of the same strategy used by institutions like Goldman Sachs,” Mackle said on Silver Edge’s website.

He picked the example of Snapchat that went public in 2017, before Silver Edge existed. If one had invested $100 before it went public, the website declares, the investor would have made $22,000.

“That’s a 21,900% gain!,” he proclaimed.

But neither Mackle, 53, of Pomona, Silver Edge, of Hackensack, New Jersey, or members of the sales staff were registered with the SEC as broker-dealers and representatives.

The SEC says registration ensures that broker-dealers maintain proper records, submit to inspections and in this instance comply with regulations that govern how pre-IPO shares can be sold.

Mackle and Silver Edge consented to a cease-and-desist order on March 3.

He founded Silver Edge in 2018. He formed the Silver Edge Pre-IPO Fund in 2019 and the Silver Edge Venture Fund in 2020.

Mackle provided the sales team with lists of potential investors, according to the SEC order. The sales people made cold calls nationwide. He followed up by answering questions from prospective investors and in some cases closed the deals.

Silver Edge charged 17% in fees: 3% for administration, 4% for management that went to Mackle, and 10% for placement that was used to compensate the sales staff.

The SEC order does not say whether investors made or lost money on their investments, but the cease-and-desist order allows for the possibility of “related investor” court cases.

Mackle and Silver Edge agreed to disgorge more than $2.5 million, including interest, and to pay a $975,000 penalty. He was barred from associating with anyone in the securities industry and from participating in any way in penny stock offerings for five years.

Six men from New Jersey who worked for Mackle as independent sales contractors were fined from $61,000 to $124,320.

The SEC noted that Mackle was registered with other firms but acted outside of their supervision when selling Silver Edge shares.

He worked for MD Global Partners as a branch manager from 2019 to 2020, according to a FINRA BrokerCheck report, and before that for Garden State Securities Inc. in Hackensack, New Jersey.

The BrokerCheck report discloses two customer disputes at Garden State Securities. In 2021 a customer alleged $550,000 in damages for excessive trading and failure to supervise. Last year, a customer demanded $1.8 million in damages for alleged churning and breach of fiduciary duty.

Both arbitration cases are pending.