The Securities and Exchange Commission has filed charges against the former chief operating officer of a New York RIA firm for helping the firm overbill clients as part of a scheme to inflate his own pay.
According to the SEC's complaint, between 2011 and December 2018, Richard T. Diver, a former senior vice president of M&R Capital, engaged in an "illicit scheme to steal approximately $6 million from his employer," the SEC said in a release.
The agency said that Mr. Diver, whose duties included managing the firm's payroll and client billing functions, allegedly inflated his salary by hundreds of thousands of dollars per year by overbilling more than 300 accounts by approximately $750,000 to generate additional revenue. When confronted by the firm's CEO in December 2018, Mr. Diver confessed to having carried out the scheme, the SEC said.
"When the scheme came to light, we took swift action to ensure that there was no further investor harm," said Marc P. Berger, director of the SEC's New York Regional Office. The SEC referred the case to the U.S. Attorney's Office for the Southern District of New York, which separately has announced criminal charges against Mr. Diver.