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April 20, 2020 at 04:11 PM
The Securities and Exchange Commission charged an ex-Merrill Lynch representative with conducting a $5.2 million fraudulent securities offering that the regulator claimed included a “Ponzi-like payments” scheme.
Merrill Lynch did not immediately comment Monday, four days after the SEC filed a complaint against former registered representative Phillip W. Conley in U.S. District Court for the Northern District of West Virginia.
The complaint alleged that, between January 2014 and September 2018, Conley induced investors to buy securities “by making a series of materially false and misleading statements and omissions concerning the legitimacy of the investments and the use of investor proceeds.”
Conley allegedly failed to invest those proceeds as promised and instead commingled investor funds in bank accounts that he controlled, the SEC said. Conley “used the majority of the funds to support his lavish lifestyle, including private jet charters, luxury automobiles, opulent jewelry and clothing purchases, and to repay other investors with Ponzi-like payments,” the regulator said.
Conley raised the funds from “at least 20 investors through the fraudulent offer and sale of securities,” convincing “some of his most trusting investors, including pastors and church congregants, to invest their money with one or more of the entities he controlled while knowing the investments were not legitimate, that he would make no securities investments on their behalf, and would instead spend their money like it was his own,” the SEC said.
He allegedly “perpetrated the fraud by claiming that he managed multiple private investment funds through his company,” ALPAX LLC, and affiliated shell companies, the SEC said.
