The Securities and Exchange Commission yesterday charged a Wisconsin advisor with defrauding 13 mostly elderly clients of $1.9 million over a three-year period.
According to the SEC complaint, filed in U.S. District Court Western District of Wisconsin, Anthony B. Liddle told these clients—including one whom he visited in a nursing home—that their investments had become less safe and he recommended moving their assets to securities that were lower risk.
At the time, between June 2019 and May 2022, Liddle was CEO and sole owner of Prosper Wealth Management (PMW) in Wasau, Wis., a registered investment firm in business from January 2013 through May 2022, as well as a broker with Landolt Securities in Oshkosh, Wis., from April 2020 to May 2022.
“Based on Liddle’s misrepresentations, clients liquidated securities holdings and also sent funds to PWM, intending to invest as Liddle advised,” the SEC complaint said. “Liddle then confirmed he had made the recommended investments, including in written statements. In reality, Liddle never purchased any of the securities.”
Instead, the complaint alleged, 40-year-old Liddle kept his client’s money, using some of it to pay some of them “interest returns” on their investment but spending most of it on himself.
A phone message left for Liddle was not returned by press time.
The complaint charged Liddle with violating the Securities Act, the Exchange Act and the Advisers Act, and requested a jury trial to determine restitution and civil penalties, as well as a permanent bar from the industry.
Due to these alleged violations, Liddle was permitted to resign by Landolt Securities on May 23, 2022, according to BrokerCheck; barred permanently by Finra on June 14, and barred by the Wisconsin Department of Financial Institutions on August 4.
According to the last Form ADV, filed in June 2022, Prosper Wealth Management served 261 clients with $15.7 million in assets under management.
“Beginning in at least June 2019 through May 2022, Liddle recommended that certain advisory clients sell existing securities or other investment vehicles using various lies to convince them he was seeking lower-risk investments on their behalf,” the complaint said. “For example, in approximately middle of 2020, Liddle called clients and alerted them to securities markets volatility in the wake of the COVID-19 pandemic. Liddle told clients, many of whom who were senior citizens, to sell then-held securities so that they could enter “safer” lower-risk investments when in reality he sought liquid assets as the first step in his fraudulent scheme.”
In December 2021, Liddle went to a nursing home to meet a client and hand wrote notes detailing her investment plan, guaranteed the safety of certain investments and told the client she could depend on a monthly interest payment. At that meeting, he took a check for $110,000 but never invested the money, the complaint said.
In another case, Liddle recommended an 81-year-old client exit an annuity “due to high risk” and invest the proceeds with him, the complaint said. She incurred a withdrawal penalty of nearly 20% of the policy’s value.
To support the scheme, Liddle allegedly opened up a new bank account in his firm’s name, but hid the account from his two employees, the complaint said. He also forged PWM statements to further the ruse, and because they were happy with what they were seeing, some clients continued to invest new money with Liddle, the complaint said.
According to reporters in the Wasau Pilot & Review, the U.S. Department of Justice has also filed felony fraud and money laundering charges against Liddle, with a maximum penalty of 40 years in prison, $740,000 in fines and restitution to his alleged victims.