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SEC Files Emergency Action Against BMG Advisory Services Inc. And Ethan Thomas Company To Stop Alleged $2 Million Senior Citizen Investor Fraud Case
On November 30, The Securities and Exchange Commission made moves to stop what it is calling an “ongoing $2 million fraud” against the elderly by filing an emergency action in the U.S. District Court for the Eastern District of New York. The SEC says that Peter Dawson and his two companies, Ethan Thomas Co., Inc. and BMG Advisory Services Inc., misappropriated investor funds and fraudulent solicitations from elderly investors, including an 85-year old woman, an Episcopal priest, and a retired, legally blind NY City firefighter.
The commission says that Dawson acquired over $2 million from no less than seven investors, and that he told his elderly clients that they should mortgage their home, surrender their variable annuity policies, and transfer the proceeds to Ethan Thomas, where Dawson could manage these assets through BMG. The SEC is accusing Dawson of making misleading and false statements to these clients regarding their funds and of promising each of them a 12-15% return on every investment.
The SEC says that Dawson authorized-to himself and his wife-payments of up to $17,378.08 from a BMG account between March and April 2006. Later that year, he authorized an additional $53,326 to himself and an additional $68,015 to his wife. He neglected to pay his clients’ mortgages, and when some of his clients found out, they called him to find out why. Dawson closed down his BMG office and unsuccessfully tried to commit suicide.