Jeffrey Slothower, a former registered investment advisor from Southampton, New York, has been found guilty on three counts of fraud and money laundering, linked to the misappropriation of over $1 million from his clients.
Slothower now faces a potential 30-year prison sentence, as stated by the Justice Department.
Prosecutors revealed that Slothower persuaded a client and her spouse to invest in what he claimed were bonds secured by homeowner’s association fees, promising them a risk-free 8% return.
Throughout 2017, the victims entrusted Slothower with more than $500,000 each, intended for the supposed HOA bonds. However, instead of investing these funds, Slothower diverted the money into his personal accounts, using it to purchase a Mercedes SUV, a membership at an exclusive East End country club, and to clear credit card debts accumulated from buying luxury items, including a Rolex watch and a Chanel purse.
“This case is a stark example of greed and betrayal, where clients who believed their funds were safely invested were deceived,” stated Breon Peace, U.S. attorney for the Eastern District of New York. “Our Office remains committed to protecting investors from fraud and ensuring that those who exploit their trust for personal gain are prosecuted to the fullest extent.”
Requests for comments from Slothower and his legal representative went unanswered.
Slothower, 46, began his career in 2001 with Speer, Leeds & Kellogg, a firm acquired by Goldman Sachs the previous year, as per BrokerCheck. He worked with several firms, including Northwestern Mutual and Merrill Lynch, before establishing his own practice, Battery Private, in 2016.
Battery Private was registered with the Securities and Exchange Commission (SEC) as an investment advisor until November 2017. However, Slothower's registrations as an advisor with the SEC and as a broker with the Financial Industry Regulatory Authority (FINRA) both ceased in 2016.
In August 2021, the SEC filed civil charges against Slothower and Battery Private, mirroring the criminal allegations and accusing the firm of inflating its assets under management in regulatory submissions.
Battery Private’s website describes the firm as a “principal investor in various opportunistic asset classes, including private companies, startups, art, collectibles, film, and real estate.”
According to the SEC’s complaint, which is still pending, Slothower was the sole employee of Battery Private.
The criminal proceedings began in 2021 with an indictment for wire fraud, investment advisor fraud, and money laundering. After a three-day trial, a jury found Slothower guilty on all charges. The court has yet to schedule a sentencing date.
