SEC charges Virginia firm with $5 million Ponzi scheme

SEC charges Virginia firm with $5 million Ponzi scheme
Edward Lee Moody and CM Capital Management are charged with defrauding 60 investors.
JUL 03, 2018
By  Bloomberg

The Securities and Exchange Commission charged a Virginia investment adviser firm and its owner with operating a nearly $5 million Ponzi scheme. The SEC was granted an order to freeze the assets in more than 30 brokerage and bank accounts controlled by the firm. The SEC alleges that Edward Lee Moody defrauded dozens of investors through his Virginia Beach-based firm, CM Capital Management. According to the SEC, Mr. Moody obtained $4.95 million from about 60 individuals and entities for investment purposes. To present the firm as a successful money management company, Mr. Moody and CM Capital periodically made repayments to investors and sent fictitious monthly account statements that purported to show profitable returns for clients. Instead, Mr. Moody used the money to pay off earlier investors, to fund speculative trading and to pay his personal expenses, including purchasing a house and a car. The District Court for the Eastern District of Virginia granted the SEC's request for a temporary restraining order to freeze assets and other emergency relief. The SEC is also seeking an injunction, disgorgement and penalties from Mr. Moody and CM Capital. Additionally, the SEC is seeking disgorgement from G.E. Holdings, a company that the SEC alleges is controlled by Mr. Moody and used to receive and transfer victim funds. Reached by phone, Mr. Moody said he had no comment, but noted that he is meeting with the SEC Thursday.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.