The SEC alleges that Scott Newsholme of Farmingdale, New Jersey, fabricated account statements, doctored stock certificates, and forged promissory notes as part of a scheme in which he convinced clients seeking his financial planning advice to give him their money to invest in various securities. Instead of investing clients’ money, Newsholme allegedly cashed their investment checks at a check-cashing store and pocketed the funds while assuring clients that their assets were safe and flourishing. According to the SEC’s complaint, Newsholme used investor money for personal expenses, gambling in Atlantic City, and Ponzi-like payments to clients who sought a return of their funds.
Scott Newsholme Charged with Stealing Investor Funds
On September 6, 2017, the Securities and Exchange Commission (“SEC”) charged Scott Newsholme, a New Jersey-based tax preparer and investment adviser, with stealing more than $1 million from clients to support his gambling habit and other personal expenditures.
“As alleged in our complaint, Newsholme repaid his clients’ trust with betrayal,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Newsholme.
The SEC’s complaint, filed in Trenton, New Jersey, charges Newsholme with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC seeks the disgorgement of ill-gotten gains plus interest, penalties, and permanent injunctions.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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