The Securities and Exchange Commission has charged former investment adviser Isaiah Goodman with allegedly defrauding his advisory clients out of approximately $2.3 million.
According to the SEC, Goodman, the owner of Minnesota-registered investment adviser Becoming Financial Advisory Services LLC, stole roughly $2.3 million from at least 20 advisory clients from September 2018 to November 2020.
Goodman is accused of falsely representing to these clients that he would invest their money in securities, including mutual funds, stocks, and private placements for their retirement and investment accounts.
Instead, the SEC claims that he misappropriated their money by using it for his own personal and business expenses, including home renovation and building expenses, car payments, and cruise vacations.
Goodman allegedly furthered the fraud by providing his clients with fake account statements and computer screenshots purporting to show that their funds were appropriately invested and their accounts had appreciated in value, and by making Ponzi-like payments to certain clients after receiving new investments from other clients.
According to the SEC, when clients confronted Goodman and demanded the return of their money, he purportedly made false promises, representations, and excuses about their money in order to conceal the existence of his fraud.
For example, in September 2020, one client notified Goodman that she wanted to transfer her account to another investment adviser. Over the next two months, he allegedly provided “a litany of phony excuses to delay the transfer, including a COVID-19 exposure at the office, processing issues with the transfer, and his lack of experience transferring accounts.”
Eventually, after threats of being reported to the Minnesota Attorney General, the SEC claims that Goodman transferred approximately $16,000 to the client in October 2020. These were reportedly funds that Goodman received from another individual, and not from any sort of securities investment, the SEC said.
In November 2020, the State of Minnesota Department of Commerce suspended Becoming Financial’s registration pending an investigation into the conduct alleged by the SEC.
The SEC’s complaint was filed in federal district court in Minnesota and charges Goodman with violating the antifraud provisions of various federal securities laws. The seeks injunctive relief, disgorgement with pre-judgment interest, and civil penalties.
In a parallel action, the U.S. Attorney’s Office for the District of Minnesota filed criminal charges against Goodman.
According to his BrokerCheck profile, Goodman was affiliated with Northwestern Mutual from 2012 to 2016, and MML Investors Services from 2016 to mid-2018.