Former adviser sentenced to two years for lying to clients, SEC

Richard Cody of Jacksonville, Fla., also must pay fine of $30,000

Mar 8, 2019 @ 11:58 am

By InvestmentNews

Richard G. Cody, a former investment adviser and registered representative barred by Finra in March 2018, was sentenced to two years in prison Thursday for deceiving former clients and lying to the Securities and Exchange Commission.

Mr. Cody, of Jacksonville, Fla., was sentenced in Boston and faces two years of supervised release after his prison term. He was also ordered to pay a fine of $30,000. Last November, Mr. Cody pleaded guilty to one count of violating the Investment Advisors Act of 1940 and two counts of making a false declaration in a court proceeding.

(More: SEC settles fraud case with jailed former Morgan Stanley adviser)

From May 2005 to August 2016, according to a release from the U.S. Attorney's Office in Massachusetts, Mr. Cody acted as an investment adviser and managed the retirement savings of three victims, including two in Massachusetts. Contrary to Mr. Cody's fraudulent assurances, the U.S. Attorney said, the total value of the victims' retirement savings had substantially diminished, and the retirement savings of two victims were entirely gone. In order to conceal the losses, Mr. Cody provided the victims with fraudulent account statements and tax documents. He also failed to inform his victims that regulators had suspended him in 2013 from acting as an investment adviser.

(More: Adviser facing 20-year prison sentence settles with SEC)

According to his BrokerCheck record, Mr. Cody began his securities career in 1997 at Merrill Lynch. He moved on to six other firms over the course of his career, which was marked by several customer disputes. During the years Mr. Cody engaged in his fraudulent activities, he was associated with Gunnallen Financial, Westminster Financial and Concorde Investment Services. He was discharged by his last employer, IFS Securities, in 2016.

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