The Securities and Exchange Commission (SEC) filed a
complaint seeking emergency injunctive relief against Bridge Securities, LLC
and Bridge Equity, Inc., as well as their owner Paul Marshall, for
misappropriating customer funds to pay for Marshall’s extravagant
lifestyle. According to the SEC, the
defendants diverted $2 million from advisory clients, several of whom are
elderly.
Marshall
created the Bridge advisory firms in December 2010 and February 2011. The following year, the defendants advised their
clients that the Bridge entities transferred accounts to a new J.P Morgan to
hold customer funds and securities and to clear trades. Defendants then caused clients to transfer
funds to various bank accounts at J.P. Morgan Chase Bank, N.A. in the name of
Bridge Equity and over which Marshall maintained exclusive control.
Defendants
misrepresented to its clients that investments were being made for their
benefit in J.P. Morgan accounts, when in fact Marshall used the money for
personal expenses, including luxury trips, child support and alimony payments,
and private school tuition and camps for his children. Using a common tactic to cover up fraud by an
advisory firm, the defendants concealed their fraud by creating fraudulent
account statements to convince customers that their accounts held non-existing
investments and provided false returns.
The SEC’s
complaint indicates that the defendants misconduct is ongoing, as it alleges
that some of the misappropriations occurred as recently as July 2013. Accordingly, the SEC seeks, among other
things, entry of an emergency temporary order restraining the defendants from further
violations of the securities laws.
Investors
who have been defrauded by their advisors and others should hire the
experienced securities attorneys at Block & Landsman to investigate their
claims and determine all the parties who are liable for their losses.
