Ex-Securities America Broker Investigated For Ponzi Scam Involvement
The US Securities and Exchange Commission (SEC) announced that it has permanently barred ex-Securities America broker, Ronald Roach, in the wake of his involvement in a $909M Ponzi fraud.
Ronald Roach pleaded guilty last month to criminal fraud charges and is facing up to 10 years behind bars. According to InvestmentNews, Securities America fired him the day after he entered his plea. The SEC contends that Roach and Joseph Bayliss, a general building and electrical contractor, operated an alternative energy tax credit Ponzi scam associated with the company DC Solar.
The Ponzi Fraud Fallout: What Happened To The Investors?
The Ponzi fraud raised about $909M between 2011 and 2018. 17 investors who were allegedly persuaded to put their money into tax credit investment contracts and sale-leaseback investments thought they’d make money through lease payments, mobile service generator operations, and tax credits.
Instead, most of the revenue came from Ponzi-like payments from newer investors to earlier investors. Also, of the 17,600 generators that were supposed to be manufactured, less than 6,000 have been located.
Roach and Bayliss were allegedly integral in selling the sale-leaseback contracts and investment fund contracts, both of which are considered securities. The two men made millions of dollars from the Ponzi scam.
Roach also is accused of issuing financial statements and reports that were misleading and falsely reported revenue from supposedly real leases while knowing this information was untrue. During the time of the Ponzi scam, he was a registered Securities America broker.
Inadequate Supervision
As Roach’s broker-dealer, Securities America, which is one of the largest brokerage firms in the nation, had a duty to properly supervise Ronald Roach and make sure he wasn’t engaging in any kind of fraudulent acts with its customers or other investors.
Brokerage firms can also be held liable for inadequate supervision if their negligent oversight of a broker allows or enables investor fraud to occur.
Another Ex-Securities America Involved In A Ponzi Fraud
It was just earlier this year that Securities American was sued for $18M by a family that sustained losses because another one of its former brokers, Hector May, operated a different Ponzi scam that defrauded investors.
The plaintiffs accused the broker-dealer of inadequately supervising May and ignoring red flags years before when the money May had stolen from them was only $750K and not the millions it later became.
Securities America fired May last year. He had been one of their advisors for 17 years. May, who worked more than 40 years in the securities industry, pleaded guilty to criminal charges. He was sentenced to 13 years in prison.
FINRA Bars Securities America Broker
A few months later, in May, the Financial Industry Regulatory Authority (FINRA) barred a different former Securities America broker, Michael Bastardi, in the wake of allegations that he made unsuitable and unauthorized trades, as well as his failure to cooperate in the self-regulatory authority’s probe into the claims.
With just six years in the industry, Bastardi also had been a registered broker with Chelsea Financial Services, National Securities Corporation, Dalton Strategic Investment Services, and Cape Securities.
Brokerage Firm Negligence
Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) have been investigating claims by investors who were financially harmed by Ronald Roach, Hector May, or Michael Bastardi. If you are someone who sustained losses as a result of their negligence or fraudulent actions or because of the actions of another Securities America broker, contact our investor fraud lawyers today.