by Howard Haykin

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

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.

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

FINRA BrokerCheck on David Braeger.]