A federal judge has ordered a former Rockland financial adviser and his firm to fork over $3.5 million to the U.S. Securities and Exchange Commission that they had agreed to pay two years ago.
U.S. District Judge Philip M. Halpern upheld sanctions, on March 3, in which Daniel J. Mackle Sr. and Silver Edge Financial LLC were barred from associating with anyone in the securities industry or participating in penny stock offerings.
Mackle, of Pomona, founded Silver Edge, of Hackensack, New Jersey, in 2018. He created two funds that invested in private companies, in the hope that they would be sold or become publicly traded in a few years, thus becoming more valuable.
Mackle raised more than $65 million from 2019 to 2023, according to court records. But Mackle and his sales staff were not registered with the U.S. Securities and Exchange Commission to sell securities.
In March 2023, Mackle and Silver Edge agreed to disgorge more than $2.5 million in ill-gotten gains, including interest, and to pay a $975,000 penalty.
But Mackle and Silver Edge Financial did pay up, so last year the SEC asked the court to enforce the deal.
Mackle argued that the disgorgement fee was unreasonable because it was based on his management fees but did take into account the expenses of operating the firm.
And he doesn’t have the money anyway.
The SEC investigation had exhausted his funds, he states in an affidavit, and left him unable to keep Silver Edge in business.
“All of my assets were invested in Silver Edge,” he says. “Silver Edge is now out of business and I no longer have any access to any of its funds or assets, nor do I have access to any sources of financing.”
He has no bank accounts or brokerage accounts, no independent source of income, and except for a $50,000 IRA, no securities. He owes $656,997 in taxes. His wife owns their house and the 2019 pickup truck he drives.
(In 2021, according to a Rockland County property record, Mackle deeded his house to his wife for $10. The Zillow online real estate marketplace estimates that the house is worth $979,000.)
“I rely on my wife, who has her own independent income, to pay our living expenses,” he stated. “As a result of my lack of assets and outstanding tax liabilities, I have been rendered financially insolvent and in poor financial circumstances.”
Judge Halpern noted that Mackle had waived his rights when he agreed to the 2023 settlement. And even if he had not waived his right to judicial review, he did not seek review at the appropriate time or in the appropriate court.
Moreover, Mackle acknowledged that he had not paid the fines. And the claim of financial hardship, Halpern said, is insufficient to preclude or reduce the disgorgement amount.
The 2023 settlement also ordered Mackle to not violate any SEC regulations in the future, but allowed him to register with the SEC as a securities representative in five years.
Mackle said it is highly unlikely that he would reapply to the SEC in five years, or that the SEC would grant his application. Thus, he stated, there is no basis for the court to prohibit him from violating SEC regulations in the future.
