SEC Settles with FA Over Alleged $71 Million Fraud Scheme
A high-profile advisor whom the SEC accused of running a $71 million scheme defrauding investors has settled with the regulator, accepting a permanent injunction, according to FA magazine.
The SEC alleges in its suit that from 2011 to 2016, William Jordan of Laguna Hills, Calif., raised $71 million from around 100 clients for several private investment funds but lied about how the money would be invested, how the funds performed and his own disciplinary history, the publication writes.
The former wealth manager allegedly told clients the money would be invested in businesses, property and fixed income alternatives but the bulk of his investments were in trust deeds, according to the civil complaint cited by FA magazine.
Jordan also allegedly inflated values and used unrealized profits to raise management fees and bonuses for himself, the publication writes. He also allegedly failed to disclose his regulatory history, including a three-month suspension by Finra over allegations of selling $90,000 worth of unsuitable investments, according to FA magazine.
In May 2017, the private investment funds and other entities connected to Jordan sought bankruptcy protection and went under the control of a restructuring officer, the publication writes. Jordan settled the civil fraud charges with the SEC in the U.S. District Court for the Central District of California in Los Angeles, without admitting or denying the allegations, according to FA magazine. The court will determine disgorgement, prejudgment interest and civil penalties, the publication writes.
Jordan is the author of a book purporting to offer investment solutions with 7% annual returns and was once named a “five-star” advisor by Crescendo Business Services, the publication writes. Last August, California state securities regulators took away Jordan’s license following a complaint that he had inflated account values to charge artificially high fees, according to FA magazine.