The Securities and Exchange Commission halted an alleged Ponzi scheme this week that had bilked senior citizens in New Mexico of millions of dollars.
In a complaint filed on Aug. 6 that was opened on Friday, the SEC charged Martin Adrian Ruiz, an investment adviser who owns Carter Bain Wealth Management, with orchestrating an ongoing securities fraud that misappropriated money from investors.
The SEC alleged that Ruiz induced 56 of his firm’s clients to invest $10.6 million in limited partnership units in the RAM Fund, which Ruiz controls. The money ostensibly was to be used to acquire real estate and to allow RAM to make commercial loans, according to the complaint, but Ruiz diverted it to other funds he controlled.
“Ruiz then spent investors’ funds on lavish personal expenses, including, among other things, paying for his residences in Manhattan and Santa Fe, and millions of dollars in credit cards bills,” the SEC complaint stated.
After filing its complaint last week in the U.S. District Court for the Southern District of New York, the SEC obtained on Aug. 9 a temporary restraining order and asset freeze against Ruiz, Carter Bain and RAM, the agency said in a statement.
"As we allege in the complaint, Ruiz recommended that his advisory clients invest in an entity based on false claims, and then stole their money," Kurt L. Gottschall, director of the SEC's Denver Regional Office, said in a statement. "Clients should be able to trust that their investment adviser will invest their assets as promised."
The SEC complaint said Ruiz hid his misuse of client funds by “making Ponzi-like payments” to some investors and providing false valuations regarding their RAM holdings.
Carter Bain Wealth Management is a Nevada limited liability company that is based in Las Cruces, New Mexico and has an office in Deming. It is registered in New Mexico and Texas and has $61 million in assets under management, according to the SEC complaint. The Ram Fund operates out of Las Vegas.
Ruiz, a resident of New York City, took advantage of his New Mexico background to perpetrate the fraud, the SEC said.
“Ruiz used his control over CBWM to target certain advisory clients, many of whom are elderly, and convince them to invest in RAM,” the SEC complaint stated. “A large number of the investors reside in or near Deming, New Mexico, a small community where Ruiz was raised and still has family.”
In ongoing litigation, the SEC is seeking disgorgement and prejudgment interest as well as civil penalties against Ruiz, Carter Bain, RAM and other entities Ruiz owns.
Ruiz did not immediately respond to a request for comment. The SEC said he has no known defense counsel.
Some in the industry say that more UBS financial advisors this year will be heading for the exits.
The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.
Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.
Raymond James also lured another ex-Edward Jones advisor in South Carolina, while LPL welcomed a mother-and-son team from Edward Jones and Thrivent.
MyVest and Vestmark have also unveiled strategic partnerships aimed at helping advisors and RIAs bring personalization to more clients.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
