The Securities and Exchange Commission has charged a former registered representative with defrauding his brokerage customers, including many elderly retirees and unsophisticated investors, in an alleged multi-year investment scam.
According to the complaint, from approximately 2014 through 2016, Ernest Romer III defrauded at least 30 retail brokerage customers out of approximately $2.7 million while working as a registered representative associated with broker-dealer CoreCap Investments Inc.
The SEC claims that Romer persuaded his customers to sell securities in their CoreCap Investments accounts and transfer the proceeds to either P&R Capital LLC or CoreCap Solutions LLC, which were both his personal businesses with no relationship to CoreCap Investments. Based on his alleged misrepresentations, the customers believed that the two business were affiliated with his broker-dealer.
Romer allegedly told his customers that upon transferring the money, he would invest it in the stock market and earn better returns than their current investments. Instead, he allegedly stole the money and used it to benefit himself and his family, to conduct trading in his own brokerage account, to make Ponzi-like payments to other customers, and to repay customers from his prior brokerage firm who had suffered losses on an investment he had recommended.
Prior to being barred by FINRA in April 2017, Romer held Series 7, 63, and 66 licenses and was previously affiliated with Leonard & Company, Comerica Securities, and briefly with L.M. Kohn & Company
The SEC is seeking a judgment ordering Romer to disgorge his ill-gotten gains with prejudgment interest, and to pay civil penalties.