The Securities and Exchange Commission has charged an East Longmeadow, Massachusetts, advisor with defrauding two advisory clients by persuading them to invest $300,000 in what it said was an “apparent scam” that originated in Turkey.
The SEC filed an enforcement action against Richard G. Duncan in U.S. District Court for the District of Massachusetts on Monday, claiming he violated his fiduciary duty as an investment advisor by ignoring, and failing to disclose, warnings from two banks that a Turkish investment opportunity he presented to at least two elderly retail investors was probably a scam.
Duncan also made materially false and misleading statements to at least one of the clients, promising as much as a 100% return on the Turkish investment, the SEC said in announcing the action.
The complaint alleged Duncan violated the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and seeks permanent injunctions, civil penalties and disgorgement plus prejudgment interest against Duncan.
Duncan was a registered broker with LPL Financial from 1989 to 2009, according to his BrokerCheck profile. He was also registered as an investment advisor representative (IAR) with LPL from March 4, 2006, until he left in 2009, according to his IAR Public Disclosure Report. After that, he was registered as an IAR with Bradway Financial from December 2009 until April 27, 2017, and then as an IAR with Ausdal Financial Partners from May 3, 2017, until April 4, 2019, the report shows.
However, that report says he was terminated by Ausdal on March 29 this year for “failure to follow firm policies and procedures regarding loans with clients and lack of timely notification of a break-in at his branch.”