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For Immediate Release: For Further Information:
October 3, 2019
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Office of The Attorney General
- Gurbir S. Grewal, Attorney General
Division of Consumer Affairs
- Paul R. Rodríguez, Acting Director
Bureau of Securities
- Christopher W. Gerold, Bureau Chief
Division of Law
- Michelle Miller, Director
Media Inquiries-
Lisa Coryell
609-292-4791
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Citizen Inquiries-
609-984-5828
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Union County Couple Ordered to Pay $500,000 Civil Penalty for Selling Unregistered Securities Tied to Startup Restaurant Chain That Never Launched
Husband Was Barred from Acting as an Investment Adviser in NJ in 2008
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NEWARK – The Bureau of Securities today issued an order finding that a Union County man who was slapped with a $1.1 million court judgment for securities violations more than a decade ago is once again violating New Jersey securities laws, this time by selling unregistered securities to investors who thought they were investing in a chain of Caribbean-American restaurants and the development of a proprietary branded jerk sauce.

The Bureau of Securities (the “Bureau”) today ordered Terrence G. LeGall, his wife Portia R. LeGall, both of Linden, and of their company LeGall Holdings, Inc., to stop selling the unregistered securities and pay a $500,000 civil penalty.

Thirty-five investors, including 33 from New Jersey, purchased $167,000 worth of stock in LeGall Holdings, believing the funds would be used to help acquire, build, and operate a global chain of restaurants called “LeGrille,” and to develop and sell a brand of jerk sauce.

Instead, the funds were commingled with the LeGalls’ personal funds and used to pay the couple’s personal expenses, including luxury car payments, credit card bills, and purported business trips to Los Angeles, Miami, and Honolulu.

“New Jersey’s commitment to ensuring honesty and transparency in its financial industry is recognized nationwide,” said Attorney General Gurbir S. Grewal. “The Bureau of Securities vigorously enforces our laws protecting New Jersey investors, including those prohibiting the sale of unregistered securities by unregistered agents.”

“While all investments have risks, prospective investors are entitled to a full and honest assessment of those risks before they hand over their hard-earned money,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “This case is a prime example of why we recommend that you verify with the Bureau the registration status of securities and the persons selling them before handing over your hard-earned savings.”

According to a Summary Penalty and Cease and Desist Order issued by the Bureau today, the LeGalls sold stock in LeGall Holdings, Inc. to investors without providing a prospectus that would have disclosed to investors the nature and risks of the investment, the company’s financial condition, and other material information, including how the proceeds from the sale of the securities would be used by the company. 

To date, the LeGalls and LeGall Holdings have not opened any restaurants, and only claim to be in discussions to place the jerk sauce for sale in various retail establishments.

The investors who purchased stock in LeGall Holdings were friends and/or clients of Terrance LeGall from a tax consulting business he owned.

“Investors tend to lower their guard and be more trusting when someone they know socially or professionally offers them a supposed ‘hot investment tip’ or ‘ground floor opportunity,’ as happened here,” said Bureau Chief Christopher W. Gerold. “I urge every investor to perform due diligence and to use the Bureau as a resource to check on the person offering the investment and the investment itself. Discovering that neither the LeGalls, nor the securities they were selling, were registered in the state would have been red flags to any prospective investor.”

Terrence LeGall was previously the subject of a Bureau investigation and regulatory enforcement action in connection with investment advisory services to investors in New Jersey. In 2008, the New Jersey Superior Court entered Final Judgment by Default, finding that Terrence LeGall had acted as an unregistered investment adviser representative, and that his company, New Century Investor, Inc., had acted as an unregistered investment adviser and employed an unregistered investment adviser representative between 2003 and 2008 in violation of the Securities Law. 

The court permanently enjoined and restrained Terrence LeGall and New Century from acting, directly or indirectly, as an investment adviser or investment adviser representative.  A monetary judgment was also entered against Terrence LeGall and New Century in the total amount of $1,119,922, representing $119,922 in restitution and disgorgement and $1,000,000 in civil monetary penalties.

Terrence LeGall is currently under federal criminal indictment in the United States District Court for the District of New Jersey, on eleven counts of aiding and abetting the preparation of false tax returns and eight counts of income tax evasion in connection with his tax preparation business.

The Bureau’s action was handled by Deputy Bureau Chief Amy Kopleton, Supervising Investigator Michael McElgunn, Investigator Michael LaChapelle, and former Investigator Richard Smullen within the Division of Consumer Affairs.

Deputy Attorney General and Section Chief Victoria Manning, and Deputy Attorney General Paul McEnroe of the Securities Fraud Prosecution Section in the Division of Law represented the Bureau in this matter. 

The Bureau is charged with protecting investors from investment fraud and regulating the securities industry in New Jersey. It is critical that investors “Check Before You Invest."

Investors can obtain information, including the registration status and disciplinary history, of any financial professional doing business to or from New Jersey, by contracting the Bureau toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at 973-504-3600, or by visiting the Bureau’s website at www.njsecurities.gov. Investors can also contact the Bureau for assistance or to raise issues or complaints about New Jersey-based financial professionals or investments.

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