Con artist gets 15 months for defrauding broker-dealers

Three-year scheme by Massachusetts man based on bogus bank transfers

Mar 7, 2017 @ 2:31 pm

By InvestmentNews

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Nathanial D. Ponn has been sentenced to 15 months in prison for crafting a scheme that defrauded several brokerage firms, the SEC said in a release.

A federal court in Massachusetts ordered Mr. Ponn to pay over $20,000 in restitution to three brokerage firms for losses caused by his fraudulent conduct. On December 7, 2016, Mr. Ponn pled guilty to three counts of wire fraud.

The Securities and Exchange Commission, which charged Mr. Ponn a year ago with conduct arising from the same facts underlying the criminal charges, said that from 2007 through at least April 2015, the Massachusetts resident defrauded numerous brokerage firms through bogus bank transfers to newly opened brokerage accounts that created the false appearance the brokerage accounts would have cash available upon the settlement of Mr. Ponn's purchases of stocks and mutual fund shares.

The SEC said that Mr. Ponn used temporary credits from the bogus transfers to purchase stock and mutual fund shares, which he repeatedly attempted to cash out or transfer to other financial institutions before the brokerages discovered that there was no money to fund the bank transfers.

The SEC said its litigation against Mr. Ponn continues. It is seeking a permanent injunction plus disgorgement, prejudgment interest and penalties.

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