A former Wells Fargo Advisor broker in Salt Lake City was barred from the securities industry yesterday for not turning over information and documents that the Financial Industry Regulatory Authority Inc. wanted in its investigation of the broker, Louis Goff.
The Securities and Exchange Commission in September charged Goff, 46, and five other individuals in a complaint with raising $2.1 million from dozens of investors in a fraud from 2019 and 2020 based on investment funds that would generate guaranteed profits from a high-yielding foreign currency, or Forex, trading program, according to Goff's BrokerCheck report. Finra's review of the SEC complaint spurred its attempt to investigate Goff.
Goff was registered with Wells Fargo Clearing Services, which does business as Wells Fargo Advisors, from 2011 through this October, according to his BrokerCheck report. An attorney for Goff in the SEC matter, Chris Andrus, did not return a call Thursday morning to comment.
Goff agreed to the Finra bar without admitting or denying its findings. After the SEC filed its complaint in September in federal court in Salt Lake, Goff entered a consent agreement with the court, agreeing to a $60,000 civil penalty and to not sell securities.
A spokesperson for Wells Fargo declined to comment.
“When investors think about Forex investing, they believe it’s an invitation to play in an institutional market and invest in a way that high-net-worth people do,” said Scott Silver, a plaintiff’s attorney. “It’s supposed to be a path to riches. Plus, there’s the opportunity to use leverage and make money from others people money.”
The Commodity Futures Trading Commission on its website said it has seen a sharp rise in Forex trading scams in recent years.
Possible signs of a fraudulent sales pitch, according to the CFTC, include: leading investors to believe they can profit from current news already known to the public; using word of mouth referrals or emails from friends and relatives, members of community organizations, churches, or social groups; asking for investors' personal information; and promising that with Forex there is no “down-turning market."
Using two entities, Phoenix and Edger Management, associated and controlled by Goff and the others, they raised more than $2.1 million from at least 49 investors in connection with the scheme, according to the SEC’s complaint.
Goff was compliance officer at Edger Management, according to the SEC.
The six men falsely told investors that their investments in two funds, POD Solutions and Edger Solutions, would generate guaranteed profits from a high-yield Forex trading program, the SEC alleged.
Goff and the others made numerous material misrepresentations to investors in each fund concerning the existence and structure of the fees charged to each fund, the method by which profits and losses were calculated in the funds, and the present and past performance of each fund, according to the complaint.
They also engaged in a scheme to deceive investors and furthered this scheme by fabricating monthly account statements to show false and inflated values in investor accounts.
Two others in the group also misappropriated investor funds by paying themselves management fees for which they were not entitled, the complaint alleged. And the group failed to disclose to investors that the individual who would purportedly execute the Forex trading program was a convicted felon and a securities fraud recidivist.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
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"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
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