Dan Frishberg

Career

Frishberg's program, The MoneyMan Report, features Frishberg's comments and analysis, is heard in the morning on South Florida radio, and is followed online via a podcast. He spent a few years as a commentator on CNBC's Closing Bell with Maria Bartiromo, the Fox News Channel, and Fox Business with Neil Cavuto. Frishberg is the author of two books, Escape from the Herd, and Investing without Borders.

Securities and Exchange Commission sanctions

Frishberg was the president and majority owner of Daniel Frishberg Financial Services, Inc. d/b/a DFFS Capital Management, Inc. (“DFFS”), an investment adviser registered with the Securities and Exchange Commission (SEC). While living in Houston, Frishberg attempted to purchase a local radio station. On March 25, 2011, the SEC filed a complaint against Frishberg, charging him with violating various SEC rules. DFFS was not financially strong enough to support the purchase of the radio station. DFFS offered promissory notes to potential investors, who were also advisory clients of Frishberg. Frishberg violated SEC rules by recommending unsuitable investments to his advisory clients. Frishberg was alleged to have approved investments despite conflicts of interest between himself and DFFS and the advisory clients. Frishberg controlled the company that issued the promissory notes. DFFS’s poor financial condition made it unlikely that DFFS could pay its promissory-note obligations. The SEC concluded that Frishberg knew that the conflicts had not been disclosed to his clients or that he simply disregarded whether they had been warned of the conflicts. The SEC ordered that Frishberg be permanently barred from associating with any broker, dealer, investment adviser, municipal securities dealer, or transfer agent.

SEC lawsuit against Frishberg for equitable relief

On November 13, 2009, the SEC sued Frishberg for $10 million to force Frishberg to disgorge the monies he received from selling the worthless promissory notes used to purchase to purchase Houston station KTEK 1110 AM for $7.75 million. The SEC also sued Frishberg's partner, Albert Kaleta and Kaleta Capital Management, Inc. The SEC charged that Kaleta had used $1.5 million of the monies to pay personal debts. Former Sugar Land, Texas mayor David Wallace was an investor in the promissory notes. The SEC focused upon Frishberg to exact the whole amount of money that was fraudulently taken.

Court-appointed receiver for Kaleta Capital Management, Inc. lawsuit against Frishberg

On August 23, 2011, Thomas L. Taylor, III, the court-appointed receiver for Kaleta Capital Management, Inc., and DFFS, sued Frishberg and his wife to recapture and return to investors those funds which were invested in promissory-note securities made by Kaleta and Frishberg and fraudulently offered to the public. Taylor also sued Barrington Financial Advisors (a company that took control of the radio station after the promissory note fraud came to light) and William Heath, the principal of Barrington, Kaleta and Frishberg. Taylor alleged fraud in the transfer of the radio station assets to Barrington Advisors to defeat the claims of investors and creditors. Frishberg was paid from Barrington for these DFFS assets and Barrington allegedly profited from their transfer. Frishberg has a fiduciary duty not to sell those assets without sharing the proceeds with his investors.

The court-appointed receiver, Taylor, obtained some of the money fraudulently obtained through the promissory notes. Specifically, the Receiver has obtained repayment of certain notes in the following amounts: $122,069 from Frishberg and $92,348 from former Sugar Land Mayor David G. Wallace. These two men took personal loans from the proceeds of the promissory notes and the court ordered their repayment.

David Wallace and his partner Costa Bajjali own interests in various companies collectively known as the Wallace Bajjali affiliated entities. Wallace Bajjali borrowed $1,177,755. The Receiver obtained a settlement with Wallace Bajjali to repay the total amount borrowed from the promissory note proceeds. Wallace Bajjali also agreed to release the receivership estate of any claims that the Wallace Bajjali affiliated entities might have against the radio station.

State of Texas censure

In 2006, Frishberg was censured by the Texas State Securities Board for failing to register with the Texas Securities Commissioner, for not filing Form U-4 information, and for working as an investment advisor with unregistered agents. He was fined $2,500 and was required to register with the state of Texas.

2011 settlement by Frishberg with SEC

Frishberg settled the SEC complaints on March 25, 2011 by paying a $65,000 penalty and by agreeing to being barred from association with any investment advisor.