SEC slaps former adviser with $4.24 million penalty

The Securities and Exchange Commission has obtained a final judgment against California-registered investment adviser representative Paul Horton Smith Sr., his companies Northstar Communications and Planning Services, and his California-registered investment adviser eGate, for perpetrating a $5.6 million investment fraud that targeted retirees and pre-retirees in Southern California.

Smith was previously charged in a parallel criminal action and is currently awaiting trial.

In May, the SEC alleged that Smith and his entities defrauded at least 35 investors by falsely claiming that Smith and Northstar would pay investors guaranteed interest based on investments in specified products. The complaint alleged that they failed to invest the funds raised as promised and instead used new investor funds to pay investor returns in a Ponzi-like fashion.

The final judgment orders the defendants, jointly and severally, to disgorge $4.24 million in ill-gotten gains plus prejudgment interest of $383,059, and orders Smith to pay a civil penalty of $4.24 million.

[More: New tools to protect the elderly from fraud, exploitation]

The post SEC slaps former adviser with $4.24 million penalty appeared first on InvestmentNews.

As our second lead editor, Cindy Hamilton covers health, fitness and other wellness topics. She is also instrumental in making sure the content on the site is clear and accurate for our readers. Cindy received a BA and an MA from NYU.

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