A financial advisor's widow has agreed to pay over $3.8 million to settle a complaint arising from a $29.3 million investment scam that the Securities and Exchange Commission alleges her late husband ran for 11 years.
Wendy Swensen, now in her mid-50s, agreed to disgorge funds she received from the fraudulent investment scheme that the late Utah advisor Stephen Romney Swensen carried out, the SEC announced Monday.
The commission — which filed a complaint against the advisor's estate and a company he ran, Crew Capital, and "relief defendants," including his widow — did not allege wrongdoing by Wendy Swensen.
The SEC alleged that the former investment advisor and broker-dealer registered representative operated the fraudulent investment offering from 2011 until 2022, raising funds from over 50 investors.
During this time, the late advisor promised investors that they would earn 5% to 10% annually by investing in Crew Capital, which he told them was a safe fund related to S&P 500 performance, the SEC contended in the October 2022 lawsuit.
Instead, he misappropriated investor funds to make Ponzi-like payments to other clients and pay for his and his family’s personal expenses, the commission alleged.
He used some of the money for fictitious earnings to certain investors in Ponzi-like fashion, "and used the bulk of the money for personal expenses, including the living expenses of his family and his mistresses, and luxuries such as private airplanes." Plus, he diverted investor funds from Crew Capital to other businesses he owned.
The complaint, filed in U.S. District Court in Utah, alleged Stephen Swensen used money invested in Crew Capital as if it were his personal account, paying for his family's living expenses and lifestyle, buying and maintaining several airplanes, purchasing homes and vehicles, and funding living expenses for at least two mistresses.
Stephen Swensen died on June 6, 2022, at age 50, according to his obituary.
His SEC record indicates that he was dismissed this day from Wealth Navigation Advisors, where'd he'd been affiliated for less than two months, for failure to disclose outside business activity. He worked as an investment advisor from early 2017 until he died and was registered with three firms over this five-year period.
A news outlet, KSL.com, reported that Stephen Swensen died by suicide.
According to FINRA BrokerCheck, the late advisor spent 19 years at eight firms as a registered rep (1997-2018), including several years at Robert W. Baird, Summit Brokerage Services and Commonwealth Financial Network.
(Credit: Adobe)
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