An indictment against Phillip W. Conley, a West Virginia-based former registered representative who was charged by the Securities and Exchange Commission in an enforcement action in April, has been unsealed in a parallel criminal action. In that action, Conley has been charged with six counts of mail fraud and one count of securities fraud in connection with a $5.2 million fraudulent securities offering.
The SEC’s complaint, filed in federal district court for the Northern District of West Virginia, alleges that Conley, who was an employee of Merrill Lynch from 2012 to 2014 and of Wells Fargo Advisors from 2010 to 2012, induced investors to purchase fraudulent investments and lied about the use of investor proceeds.
The complaint further alleges that Conley held investor funds in bank accounts that he controlled and used most of the funds for his personal expenses, while using the rest to make Ponzi-like payments to earlier investors.
The complaint charges Conley with violations of the antifraud provisions of the federal securities laws and seeks permanent injunctions, disgorgement of ill-gotten gains, prejudgment interest and civil monetary penalties against Conley. The SEC’s litigation against Conley remains ongoing.
The Financial Industry Regulatory Authority Inc. suspended Conley in December 2015 for failing to comply with an arbitration award or settlement agreement or to satisfactorily respond to a Finra request to provide information concerning the status of compliance.
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