Investors Awarded $3M In Claim Against Spire Securities

A Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded 23 investors $3M in their claim against Spire Securities, its CEO David Lloyd Blisk, and CCO Suzanne Marie McKeown. The broker-dealer and its executives were accused of inadequately supervising former broker Patrick Evans Churchville, whom the investors contend fraudulently sold them investments that caused them to lose money in a $21M Ponzi scam.

Churchville sold the investments through ClearPath Wealth Management, a registered investment adviser that he operated outside of Spire Securities. Still, the claimants contended that the broker-dealer should have prevented Churchville from causing them financial harm while he was a Spire Securities broker and could have done so had they properly overseen him.

Churchville pleaded guilty in 2016 to criminal charges accusing him of operating a $21M Ponzi scam. In 2017, he was sentenced to seven years in prison for tax evasion and wire fraud.

Court documents submitted in US District Court showed that from 2008 and 2011, Churchville invested about $18M of clients’ funds in JER Receivables, discovering as early as mid-2010 that JER principals had fooled him and millions of dollars were lost. Rather than telling investors, he sought to conceal these losses while continuing to get paid fees, eventually misappropriating about $21M of investors’ funds, including using some of the money to pay back investors while claiming these were their returns.

Meantime, Churchville continued to tell investors that past investing with JER Receivables had resulted in “high rates of return.” He also allegedly used their money to buy a $2.5M home and pay over $820K in taxes.

Spire Securities and its executives disagree with the FINRA arbitration panel’s ruling, noting that the broker-dealer was not investigated in any probe into Churchville’s Ponzi fraud. Still, the scam did occur while he was a Spire Securities broker.

Previous to Spire, Churchville, with 16 years in the industry, was a registered broker with Morgan Stanley (MS), Wachovia Securities, UBS Painewebber, and Oppenheimer and Co. In addition to the criminal case against him, he was barred by the Securities and Exchange Commission in 2017.

Broker Misconduct Cases
If Patrick Evans Churchville was your broker or investment adviser and you suffered losses, please contact Shepherd Smith Edwards and Kantas, LTD LLP (SSEK Law Firm) today. There is still time to file a broker fraud claim through FINRA arbitration to try and recoup your losses.