Stockbroker pleads guilty to stealing $6 million in Ponzi scheme

Stockbroker pleads guilty to stealing $6 million in Ponzi scheme
Claimed funds were invested conservatively but he was pursuing risky day-trading strategy.
AUG 26, 2015
A former broker who left the securities industry more than a decade ago and then started what prosecutors described as a $6 million Ponzi scheme has pleaded guilty to fraud charges. Sunil Sharma, 68, faces 20 years in prison on charges that between 2008 and 2014, he raised $8.36 million from 32 investors to pursue a risky day-trading strategy using options. When the strategy failed, he repaid old investors with contributions from new investors, federal prosecutors said. Mr. Sharma also faces possible fines and restitution. He's scheduled to be sentenced by a U.S. district court judge in San Diego in August. Officials said he also took $2.5 million in investor money for his personal use, including $700,000 for a down payment on a house, about $12,000 for a Mediterranean cruise and leases on a BMW and Mercedes SL. He ran out of money in January despite sending statements to investors showing gains. (More: SEC files fraud charges against two advisers for allegedly falsifying credentials) Mr. Sharma, of Carlsbad, Calif., was a A.G. Edwards, Merrill Lynch and Raymond James-affiliated broker. But he relinquished his license after his clients suffered in the U.S. stock market rout that followed the September 11 terrorist attacks, prosecutors said. Prosecutors said he would later remake himself as an insurance salesman and, after attending a 2007 workshop on options trading, promoted a strategy he managed through his firms Gold Coast Holding and Safe Harbor Tax Lien Acquisitions as a conservative way to enhance returns. U.S. attorney Laura E. Duffy said the Ponzi scheme “was a bit harder to detect than usual as Sharma did not promise his investors outlandish returns,” according to a statement. Mr. Sharma's lawyer, Earll M. Pott at Klinedinst in San Diego, did not respond to a request for comment.

Latest News

Estate planning gaps leave families facing steep probate costs, new report finds
Estate planning gaps leave families facing steep probate costs, new report finds

With trillions of dollars set to change hands, new data suggests probate costs and delays are becoming a bigger factor in estate planning decisions.

Orion, RFG moves take aim at onboarding and transition speed
Orion, RFG moves take aim at onboarding and transition speed

Orion and RFG Advisory tackle account-opening delays with new updates as custodial integrations reshape how fast advisors can move client assets.

Corient adds $5B New York multi-family office Seven Bridges
Corient adds $5B New York multi-family office Seven Bridges

The deal extends the acquisitive mega-RIA's rapid 2026 expansion as industry consolidation hits record levels nationwide

Navigating the straight
Navigating the straight

As recent Middle East tensions put the Strait of Hormuz back in focus, a structured process with purpose can help protect investors against their natural self-sabotaging tendencies in choppy markets.

Commonwealth-affiliated Longwave hires from LPL-affiliated firm amid Pacific Northwest expansion
Commonwealth-affiliated Longwave hires from LPL-affiliated firm amid Pacific Northwest expansion

ESG-focused Longwave Financial, approaching $1B AUM, acquired Seattle-based MG Financial and hired a client services manager from an LPL-affiliated firm.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income