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Regulation and Compliance > Litigation

Couple Bilked in $29M Ponzi Scheme Sues Advisory Firm

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A married couple who say they lost $850,000 at the hands of a now-deceased advisor who allegedly ran a nearly $30 million Ponzi scheme has sued the advisory firm he worked for, saying it allowed their money to be lost because of supervisory mistakes.

In a complaint filed Tuesday with the American Arbitration Association, claimants Mark Fox, 61, and Barbara Fox, 59, of Cocoa Beach, Florida alleged supervisory failures at Centerville, Utah-based Wealth Navigation Advisors, which does business under the name Oak Lane Advisors, relating to a decade-long, $29 million scheme.

The scheme was operated by Stephen Romney Swensen, one of the firm’s former registered investment advisors, according to the complaint.

The complaint was filed on behalf of the claimants by attorneys at the law firm Peiffer Wolf Carr Kane Conway & Wise, and alleged the advisory firm was guilty of, among other things, breach of fiduciary duty, failure to supervise, negligence and breach of contract.

From 2011 to 2022, Swensen, now deceased, operated Crew Capital, a “fraudulent investment offering” that raised more than $29 million from more than 50 investors, including $850,000 invested by the Foxes in 2019, while Swensen was registered with WNA, according to the complaint.

Instead of investing clients’ money, Swensen used their funds “as though it were his personal piggy bank,” according to the complaint. Swensen made Ponzi-type payments of returns to investors that the complaint said were funded from the capital investments of the Foxes and other victims.

“Swensen also used Crew Capital’s money to pay for his family’s living expenses,” as well as “to buy and maintain several airplanes” and also “purchase homes and vehicles, and to fund his and his family’s lifestyle,” according to the complaint.

The advisor also spent Crew Capital’s money on the living expenses of “at least two mistresses” and to pay the operating expenses of two of his other businesses, Swensen Capital and Wingman, the complaint alleged.

“But not for WNA’s negligent failure to supervise Swensen, Claimants would never have invested money in Swensen’s Crew Capital fund and suffered devastating investment losses,” the complaint says.

“WNA’s overall supervisory structure was inadequate to reasonably supervise Swensen, and WNA failed to establish supervisory policies and procedures and failed to follow those policies and procedures it had in place,” according to the complaint.

The advisory firm also “failed to reasonably follow up on red flags relating to Swensen’s ongoing fraudulent conduct,” the complaint says.

Mark Fox met Swensen 25 years ago and they formed a friendship, according to Fox. The advisor eventually recruited Fox as a client and Fox followed Swensen as he switched from firm to firm over the past 15 years, most recently at WNA from 2018 to 2022.

In 2019, Swensen approached Fox about a new investment opportunity: the Crew Capital Funds. Swensen described the funds as low-risk and guaranteed to pay 5% to 10% annually. Fox said he trusted his longtime friend, so he and his wife invested a significant portion of their life savings.

“It’s tragic that a registered investment advisor would ruin the lives of over 50 clients and friends to bankroll his airplanes and mistresses,” Jason Kane, partner at Peiffer Wolf, said Tuesday during an online briefing with reporters. “It’s also unbelievable that it could happen under WNA’s nose without anyone raising a red flag.”

During the same briefing, Mark Fox told reporters he and his family were “still reeling from the shock” that their “own trusted investment advisor, who I considered a very good friend, had been ripping us off for years.” Fox said he and his wife only learned of the Ponzi scheme after Swensen died.

“WNA only terminated Swensen for failing to disclose an unapproved outside business activity on June 6, 2022, the same very day the investment adviser committed suicide,” the complaint alleged.

The Foxes’ lawsuit follows a complaint filed by the Securities and Exchange Commission in U.S. District Court, Northern Division, in Salt Lake City, Utah, on Oct. 14, 2022, over the Ponzi scheme.

The SEC complaint made many of the same allegations about Swensen and his scheme as the Foxes but named the estate of Swensen and Crew Capital as defendants, with relief defendants including his wife, Wendy Swensen.

(Image: Shutterstock)


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