SEC Bars Ponzi Scheme Operator Sentenced to 13 Years in Prison
The U.S. District Court for the Eastern District of Virginia entered a default final judgment against a Virginia investment adviser firm and a settled final judgment against its owner who were previously charged by the SEC with operating a $5 million Ponzi scheme.
The U.S. District Court for the Eastern District of Virginia has entered a final judgment against a Virginia investment adviser firm and its owner who were previously charged by the SEC with operating a $5 million Ponzi scheme. He was sentenced to 13 years in prison and was permanently barred by the SEC from practicing in the securities industry.
In June 2018, the SEC charged Edward Lee Moody, Jr. and his wholly-owned investment adviser firm CM Capital Management LLC with operating a Ponzi scheme that defrauded dozens of retail investors over a period of at least nine years.
In settling the SEC’s charges against him, Moody acknowledged that he pled guilty in a parallel criminal action to operating a scheme to defraud investors. In that matter, Moody admitted that he fraudulently represented to investors that he would invest their funds on their behalf, when, in fact, he misappropriated investor funds for his personal benefit.
In the final judgments against them in the SEC’s case, both Moody and CM Capital are permanently enjoined from violating the antifraud provisions of federal securities laws. In addition, Moody agreed to pay disgorgement of more than $3 million plus prejudgment interest of $32,000, which settles the restitution entered against him in the criminal action.
In a related administrative proceeding, Moody has agreed to an SEC order permanently barring him from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or national recognized statistical rating organization.
