Adviser in dutch for allegedly scamming Amish clients

The Securities and Exchange Commission has charged a 77 year-old Amish financial adviser with defrauding his fellow Amish in an investment scheme that allegedly went on for 24 years.
JAN 30, 2011
The Securities and Exchange Commission has charged a 77 year-old Amish financial adviser with defrauding his fellow Amish in an investment scheme that allegedly went on for 24 years. From 1986 through June 2010, Monroe L. Beachy, who until June ran Sugarcreek, Ohio-based A&M Investments, raised $33 million from more than 2,600 investors — most of whom were Amish, according to the SEC complaint. Mr. Beach allegedly told investors that their money would be used to purchase risk-free U.S. government securities. Instead, he made speculative investments and lied about it, according to the complaint, which was filed Feb. 15 in the U.S. District Court for the Northern District of Ohio. Mr. Beachy filed for bankruptcy in June 2010. Up until that point, the SEC claims, he lied about how he was investing his clients' money. The commission said, “Beachy also never told his investors that he had experienced significant losses on the underlying investments.” Rather, he “provided his investors with monthly account statements that showed fabricated gains,” the SEC said. By the time Mr. Beachy filed for bankruptcy in June 2010, less than $18 million of the original $33 million of investor money remained. Mr. Beachy, reached at his home, declined to comment. Because of the length of Mr. Beachy's alleged scheme, generations of families were affected because older generations of Amish investors referred their children to him. “Amish children did in fact purchase investment contracts from Beachy,” according to the complaint. Mr. Beachy has agreed to settle the SEC's charges without admitting or denying the allegations, according to an SEC notice about the complaint. The SEC is not imposing a civil penalty on him, based on his financial condition, according to the agency's notice.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave