SEC charges Michigan-based adviser in $2.7 million investment scam

The Securities and Exchange Commission charged a Michigan-based financial adviser with defrauding elderly retirees and other unsophisticated investors out of $2.7 million. ​ According to the SEC, Ernest J. Romer III persuaded at least 30 of his clients to transfer proceeds from their brokerage accounts to P&R Capital or CoreCap Solutions. From 2014 to 2016, customers believed that the two companies were Mr. Romer's affiliated broker-dealers, but instead, they were his own businesses. The SEC said Mr. Romer promised to give his clients a better return on their investments, but he allegedly took the savings to invest in his own trading, make Ponzi-like payments and repay customers who lost investments at his former brokerage firm. He also allegedly took the money to benefit himself and his own family. Mr. Romer could not be reached for comment. Mr. Romer has been barred by the Financial Industry Regulatory Authority Inc. and, according to BrokerCheck, has 47 disclosures, including nine criminal events and two financial events. The SEC is seeking disgorgement of ill-gotten gains with prejudgment interest as well as civil penalties. (More: SEC files fraud charges against firm for working with barred broker)