A former Denver financial advisor who is serving a 12-and-a-half-year prison sentence for investor fraud on Monday was permanently barred from working in the financial securities industry by the Securities and Exchange Commission.

Shawn R. Merriman, 49, of Aurora, Colo., a former Mormon bishop, has consented to the entry of the SEC's order. Merriman is barred from association with any broker, dealer, investment advisor, municipal securities dealer or transfer agent. Any re-application attempt by Merriman will be subject to the applicable laws and regulations governing the SEC re-entry process.

In 2009 the SEC charged Merriman with running a Ponzi scheme through his company, Market Street Advisors. The agency said he raised up to $20 million from at least 38 people to invest in stocks and options, but didn't invest the funds after his first year in business during which he racked up losses. He issued falsified financial statements to clients and used millions of dollars in investor funds to support his lavish lifestyle and pay withdrawals to other investors, the SEC said.

According to the SEC, Merriman from 1994 through 2009 acted as an investment advisor, soliciting funds from investors, purportedly to manage the funds to make a profit for investors. Merriman entered into operating agreements with investors to place their money in securities, including options, and exercised complete control over the investments in exchange for fee-based compensation.

The SEC claimed that Merriman misappropriated and misused investor proceeds, failed to trade in securities as represented to investors, and engaged in fraud or deceit with investors. Merriman also sent false account statements to investors through the U.S. mail to conceal the scheme.

On Dec 2., 2009, Merriman pleaded guilty to one count of mail fraud before the U.S. District Court for the District of Colorado. On Sept. 14, 2010, Merriman was sentenced to a prison term of 151 months followed by three years of supervised release and ordered to make restitution in the amount of $20,124,183.

-Jim McConville