SEC Obtains Judgment Against Former SII Investments Advisor for Allegedly Defrauding Clients
A federal district court entered a judgment against a former SII Investments advisor and tax preparer for defrauding his clients of more than $1 million to support his lifestyle and gambling habit.
A federal district court entered a judgment against a former SII Investments advisor and tax preparer for defrauding his clients of more than $1 million to support his lifestyle and gambling habit.
In its complaint, the Securities and Exchange Commission alleged that Scott Newsholme of Farmingdale, New Jersey, fabricated account statements, doctored stock certificates, and forged promissory notes as part of a fraudulent investment scheme.
Instead of investing clients’ money, Newsholme allegedly cashed their investment checks at a check-cashing store and pocketed the funds while assuring clients that their assets were safe and flourishing.
The complaint further alleged that he made Ponzi-like payments to certain investors who asked about their investments, and he used investor money for his own purposes, including to gamble and to pay personal expenses.
Newsholme consented to the entry of a judgment permanently enjoining him from violating securities laws and was ordered to pay disgorgement, prejudgment interest, and a civil penalty in amounts to be determined at a later date.
Earlier this month, in a parallel criminal action, Newsholme pled guilty to wire fraud, aggravated identity theft, and aiding and abetting the filing of false tax returns.
Between 1998 and 2014, Newsholme was a registered representative for two registered broker-dealers, Royal Alliance and most recently SII Investments. SII terminated his employment in July 2014 after a client alleged that he had taken IRA funds while at his prior broker-dealer and falsely represented that the account was held with SII. He was barred by FINRA in September 2014 for failure to respond to its requests for information.
