Ex-Virginia rep barred, ordered to disgorge $4.15M over options scheme collapse

A former Virginia broker and RIA representative has been permanently barred from the securities industry and ordered to give up $4.15 million after federal regulators said he ran a high-risk options scheme that wiped out the savings of several retirees.

The SEC revealed this week that on Oct. 3, a federal judge in the Eastern District of Virginia entered final judgment against Andrew Scott Corbman, 54, following an SEC civil case that tracked conduct already at issue in a parallel criminal prosecution.

Corbman, who previously worked at multiple broker-dealers and as an investment adviser representative – he was registered in the industry for 21 years until 2016, according to his BrokerCheck record – consented to the judgment without admitting or denying the SEC’s allegations.

As described in the SEC’s complaint filed in September, Corbman began pitching investments in 2019 to retail clients in Northern Virginia, including three retired military officers and a retired federal civil servant.

Earlier this year, the SEC issued a permanent bar against another advisor in New Jersey whom it said defrauded Gold Star military families out of millions of dollars.

Corbman raised roughly $4.27 million through unsecured loan agreements that promised high fixed returns, often around 30%. In some cases, he would reportedly promise an additional cut of his trading profits. Investors mailed checks or wired money to Corbman, who said he would use their capital to trade stocks and options and then repay principal plus interest.

Regulators say those assurances were false on several fronts. Corbman allegedly told clients the arrangements were low risk and suitable for retirement funds, even as he engaged in what the complaint describes as “risky, highly speculative, day trading” in stock options. He also provided fabricated trading histories that claimed an “82% win hist[ory]” and “90% avg return,” and in one email told a couple that “with gains you are due $287,000” on an initial $200,000 investment.

In reality, the SEC says, Corbman was a consistently losing trader. Between 2019 and 2022, he allegedly racked up cumulative losses exceeding $3 million, including more than $1.7 million in options alone. Brokerage records show he was repeatedly warned and temporarily restricted because of “massive losses,” yet he continued the same strategy while telling investors he was “assuming all risk” and encouraging them to roll over and increase their positions rather than withdraw funds.

The complaint also highlights omissions about Corbman’s background. Before launching the scheme, he had already filed for personal bankruptcy, accumulated more than a dozen FINRA customer disputes, accepted a permanent bar from associating with any FINRA member, and surrendered his Virginia insurance license after a state investigation. None of those facts were disclosed to investors, regulators allege.

Of the $4.27 million raised, only $120,000 was ever returned, and part of that repayment came from other investors’ money, according to the SEC. Roughly $760,000 was allegedly diverted to personal expenses such as back taxes, credit card bills, college tuition, and legal fees tied to Corbman’s own bankruptcy.

Under the final judgment, Corbman is permanently enjoined from violating antifraud provisions of the Securities Act and Exchange Act, and from acting as or being associated with any broker, dealer, or investment adviser.

The court ordered $4.15 million in disgorgement, deemed satisfied by a restitution and forfeiture order in his related criminal case, United States v. Corbman, where he has already pleaded guilty to wire fraud. He was sentenced to serve a three-year prison term in April.