Thursday, 16 July 2015

SEC Charges Purported Investment Adviser in San Diego With Stealing Client Funds and Conducting a Ponzi Scheme

Otmane El Rhazi,

The Securities and Exchange Commission today charged a purported investment adviser in San Diego with stealing money from clients for personal use and conducting a Ponzi scheme to pay customers making redemption requests.

In a complaint filed in federal court in San Diego, the SEC alleges that Paul Lee Moore and Coast Capital Management, his purported investment advisory firm, raised $2.6 million from clients.  Instead of investing their money as promised, Moore allegedly siphoned nearly $2 million of client funds to pay travel expenses, buy retail goods, and fund his use of pornographic websites.  The complaint alleges that Moore used the remaining $625,000 in client funds to repay earlier clients with money from new clients in classic Ponzi scheme fashion.  Moore allegedly sent fake account statements to clients showing securities that he never purchased and attracted new clients when existing customers showed the statements to family, friends, and business associates.  Moore also is alleged to have lied to clients about his education, past employment experience, and the amount assets managed by Coast Capital.

Coast Capital, which was not registered as an investment adviser with the SEC or any state regulator, is no longer in business.

In a parallel action, the U.S. Attorney’s Office for the Southern District of California today will announce criminal charges against Moore.

“As alleged in our complaint, Moore betrayed his clients, brazenly stole nearly $2 million for his own activities and conducted a Ponzi scheme with the remaining funds,” said Michele W. Layne, Director of the SEC’s Los Angeles Regional Office.

The SEC’s complaint, filed in federal court in San Diego, charges Moore with violating federal antifraud laws and related SEC rules.  The SEC seeks a permanent injunction, return of allegedly ill-gotten gains plus prejudgment interest and a penalty.

The SEC’s investigation was conducted by David M. Rosen and supervised by Marc J. Blau of the Los Angeles office.  The SEC’s litigation will be led by Gary Leung.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of California and the Federal Bureau of Investigation.

Full Text

Regards,
Otmane El Rhazi
Press Releases
Equity Trading
Text/Mobile, +44 7414 782 320


RISK DISCLOSURE STATEMENT
ANY OPINIONS, NEWS, RESEARCH, ANALYSIS, OR OTHER INFORMATION ON THIS WEBSITE IS PROVIDED AS GENERAL MARKET COMMENTARY ONLY. THERE ARE RISKS ASSOCIATED WITH UTILIZING AN INTERNET-BASED DEAL EXECUTION TRADING SYSTEM INCLUDING THE FAILURE OF HARDWARE, SOFTWARE, AND INTERNET CONNECTION.

No comments:

Post a Comment