Administrative action follows Federal Court order for adviser Paul Marshall and associated companies to pay fines and disgorgement of more than $15 million.
The SEC on Tuesday took steps to bar a former broker and investment adviser who allegedly misappropriated $2 million in client assets and last month was ordered to pay $15 million in penalties and restitution.
The Securities and Exchange Commission initiated administrative proceedings against Paul Marshall in an effort to remove him from the industry. In 2013, the Financial Industry Regulatory Authority Inc. barred Mr. Marshall from associating with any broker-dealer member firm.
The SEC charged Mr. Marshall and his related investment advisers, Bridge Securities and Bridge Equity Inc., last year in the U.S. District Court for the Northern District of Georgia with using approximately $2 million in client assets for personal use. He spent those funds on luxury vacations, child support, alimony, private school tuition and camps for his children, the SEC said in its initial complaint filed in September 2013.
In the original complaint, the SEC accused Mr. Marshall of diverting client assets into accounts he controlled, creating misleading account statements and raising funds for a private placement he allegedly controlled, FOGFuels Inc.
“Rather than use those funds for the company's business operations, as was represented to the client, [Mr.] Marshall used them instead to, among other things, again, pay his personal living expenses and make payment to a former client,” the complaint said.
The judgment in the federal case, which was rendered on Sept. 16 by Judge Timothy C. Batten, found Mr. Marshall and his companies liable for $1.5 million in disgorgement of profits gained as a result of the alleged scheme.
Mr. Marshall also was personally liable for $1.35 million in civil penalties. The investment advisers, Bridge Securities and Bridge Equity, were each liable for $5.8 million in civil penalties, and FOGFuels was liable for another $725,000 in penalties.
Mr. Marshall began his career in 1989 with PaineWebber Inc. and served at approximately eight other brokerage firms during his career, according to Finra registration records. He was discharged from Oppenheimer & Co. Inc. in 2008 after a customer complaint alleged he had taken a loan from a client and engaged in private securities transactions, according to his BrokerCheck record.
Mr. Marshall could not be reached for comment.
