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SEC Charges Investment Adviser With Running $3.9 Million Fraud

Posted on November 4, 2018 at 9:20 AM

The SEC charged a former registered representative and investment adviser in Altoona, Pennsylvania, with operating a long-running offering fraud.

The SEC’s complaint alleged:

  • that Douglas P. Simanski raised over $3.9 million from approximately 27 of his brokerage customers and investment advisory clients, many of them retired or elderly, by telling them that he would invest their money in either a “tax free” fixed rate investment, a rental car company, or one of two coal mining companies in which Simanski claimed to have an ownership interest.  
  • He told the investors to write checks payable to personal bank and brokerage accounts he opened in his wife’s name. 
  • Instead of investing the money as he promised, Simanski largely used the money to repay other investors and for his personal use. According to the complaint, Simanski’s scheme collapsed when one of his clients contacted the Financial Industry Regulatory Authority (FINRA) and Simanski admitted his scheme to his employer.

In a parallel action, the U.S. Attorney’s Office for the Western District of Pennsylvania today announced that Simanski pleaded guilty to criminal charges.

The SEC’s complaint, filed in federal court in Johnstown, Pennsylvania, charged Simanski with violating antifraud provisions of the federal securities laws. Simanski has agreed to settle the charges against him. The settlement, which is subject to court approval, orders injunctive relief and disgorgement of ill-gotten gains plus interest.

Simanski also agreed to the entry of an SEC order that, when entered, will bar him from the securities industry for the rest of his life.

Read More:
Release
https://www.sec.gov/news/press-release/2018-252" target="_blank">https/www.sec.gov/news/press-release/2018-252
Complaint
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-252.pdf" target="_blank">https/www.sec.gov/litigation/complaints/2018/comp-pr2018-252.pdf

Categories: Fraud