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

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

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

Most asset managers are using AI, but few let it call the shots
Most asset managers are using AI, but few let it call the shots

Survey finds AI widely embedded in research and analysis, but barely touching portfolio construction or trade execution.

LPL, Raymond James score fresh recruits in advisor recruiting battle
LPL, Raymond James score fresh recruits in advisor recruiting battle

Two firms land teams managing more than $1.1 billion in combined assets from Kestra and Edward Jones.

Edward Jones facing more race bias claims in new lawsuit
Edward Jones facing more race bias claims in new lawsuit

A private partnership, Edward Jones is a giant in the retail brokerage industry with more than 20,000 financial advisors.

Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team
Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team

Meanwhile, Raymond James and Tritonpoint Partners separately welcomed father-son teams, including a breakaway from UBS in Missouri.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management