A Michigan-based investment manager stole more than $2.7 million from his clients, which for some was their entire retirement savings, the Securities and Exchange Commission announced Tuesday.
Ernest J. Romer III of Shelby Township, Mich., is charged with fraud for taking money from his brokerage customers and, instead of investing it for them as he promised, used it for his own investments, paid investors who had lost money in an earlier scheme of his, and gave some to relatives, the SEC said.
Many of those who were victims of the scheme, which lasted from 2014 to 2016, were elderly retirees and unsophisticated investors, the SEC complaint said.
Romer persuaded at least 30 of his customers to sell securities in their brokerage accounts and transfer the proceeds to either P&R Capital or CoreCap Solutions, both of which were companies controlled by him. Romer told them he would invest the money in the stock market and earn them a better return than their current investments were earning.
Until he was fired in early 2017, Romer was a registered representative with the brokerage firm CoreCap Investments, which is based in Southfield, Mich. Contrary to what Romer told customers, CoreCap Solutions and P&R Capital had no relationship with CoreCap Investments, the complaint said.
The SEC is asking for a judgment ordering Romer to disgorge his ill-gotten gains with prejudgment interest, and to pay civil penalties.