Not far from the home of the original “Ponzi scheme” in Boston, the SEC filed a complaint in the United States District Court for the District of Rhode Island on May 7, 2015 alleging that financial advisor and former broker Patrick Churchville operated a Ponzi scheme that defrauded investors out of $11 million. The SEC complaint alleged that the fraud was run out of a company called Clearpath Wealth Management, LLC.
According to the SEC complaint, Mr. Churchville operated a Ponzi scheme by using investments from new investors to pay the distribution claims of old investors. The SEC also alleged that Mr. Churchville diverted approximately $2.5 million of investor funds to purchase his home overlooking Narragansett Bay. Local News Station WPRI reported on its website that the home is now up for sale for $3.5 million.
The SEC alleged that the fraud began in around December of 2010. According to his publicly available Financial Industry Regulatory Authority (FINRA) CRD report, Mr. Churchville was registered by Spire Securities, LLC from August 2009 through February 2011, during the time that the SEC alleged fraudulent conduct occurred. Broker-dealers generally have an obligation to supervise the offices where their registered employees such as Mr. Churchville work. It is unclear from the SEC’s complaint or FINRA CRD what, if any, disclosure was made to Mr. Churchville’s investors by the firm.
Malecki Law has previously investigated and successfully handled securities arbitrations concerning private securities transactions and other fraudulent conduct by brokers who are employed by FINRA member broker-dealers. If you believe you have suffered losses as a result of questionable actions taken in your securities account, please contact us immediately for a confidential consultation.