The Securities and Exchange Commission barred an investment advisor from the industry because of sanctions imposed by the New Hampshire securities regulator and charged an electronics company executive with insider trading. It also charged an unregistered broker with fraudulent stock sales.
SEC: Fake Broker Sold Phony Stock to Pay Gambling Debt
The SEC has charged Gregory Ruehle, an unregistered broker in Oceanside, California, with fraudulent stock sales.
According to the agency, Ruehle raised approximately $1.9 million from about 100 investors after he claimed to be selling them stock in a medical devices company. However, he never delivered the stock, and instead used the money for personal expenses, including the payoff of gambling debts.
As early as 2012, Ruehle, who was a former consultant for La Jolla, California-based ICB International Inc., promised investors in California and Minnesota that he would sell them shares of company stock that he personally owned. But he sold far more stock than he ever actually owned, and the shares he did have weren’t transferable.
To make it worse, Ruehle fabricated documents that he told investors were from the company, and he even sent out faked stock certificates to tell each investor how much stock they “owned” — and sent the phony certificates along with another faked document: a letter claiming that the securities had been transferred from him to the investor. As an additional touch, he also sent phony confirmations attesting to the transfer of shares; the confirmations were on faked company letterhead and were supposedly signed by the company’s CEO.
The SEC seeks disgorgement plus prejudgment interest and penalties against Ruehle. Its investigation is continuing, and in a parallel action, the U.S. Attorney’s Office for the Southern District of California has also announced criminal charges against Ruehle.
SEC Bars Advisor on State Sanctions
Nicholas Rowe, a Hollis, New Hampshire investment advisor who was the owner of Focus Capital Wealth Management Inc., has been barred from the securities industry based on a bar imposed by the state securities commission in New Hampshire.
According to the SEC’s administrative order, New Hampshire revoked Focus Capital’s investment advisor registration on March 8, 2013, after it alleged that Rowe and Focus Capital engaged in an investment strategy involving leveraged and inverse exchange-traded funds (ETFs) that was unsuitable for their clients and misrepresented both the fees to be charged and Rowe’s qualifications. Rowe and Focus Capital were ordered to pay $20,000 (a $5,000 fine plus the costs of the investigation) and restitution.
Rowe can’t apply for reinstatement without satisfying a number of conditions, one of which is the satisfaction of financial penalties ordered by agencies other than the SEC. Rowe, who declared bankruptcy, still has financial penalties pending.
He has settled with the SEC without admitting or denying the charges. Electronics Exec Charged With Insider Trading