SEC charges barred adviser with fraud
David Schamens, who was barred back in 1992 for lying to retail investors, solicited investments in a pooled investment vehicle, but used the money for personal expenses and to repay previous investors, according to the SEC.
The SEC on Monday charged an adviser whom the agency had barred back in 1992, David Schamens of Greensboro, North Carolina, with lying to retail investors.
The Securities and Exchange Commission said in a press release that beginning in 2019, Schamens asked people to invest in a pooled investment vehicle, the Tradestream Algo Fund, that would hold stocks that would be traded according to a proprietary algorithm.
But Schamens used most of the money on personal expenses and to repay previous investors, then sent investors fake monthly statements and a fake audit letter, according to the SEC.
Also Monday, the U.S. Attorney’s Office for the District of New Jersey charged Schamens with operating a Ponzi scheme that defrauded at least 25 people of at least $6.8 million.
Schamens lives in Greensboro, North Carolina, but the Algo Fund was based in Secaucus, New Jersey.
In 1992, the SEC had charged Schamens with misappropriating funds. As part of a settlement, he was barred from working with brokers, dealers, municipal bond dealers, advisers or investment companies. The SEC is seeking a permanent injunction, disgorgement and penalties.
The U.S. Attorney’s Office has charged Schamens with one count each of wire fraud, securities fraud and money laundering.
[More: Sanctioned Ponzi scheme salesmen keep shilling planning, advice]
Learn more about reprints and licensing for this article.
