Securities Lawyers Blog
The Securities and Exchange Commission (SEC) recently announced fraud charges against Rhode Island investment adviser ClearPath Wealth Management, LLC, (ClearPath) and its president, Patrick Churchville (Churchville), for operating a fraudulent investment scheme that resulted in at least $11 million investor losses.
According to the complaint, from December 2010 onward ClearPath and Churchville diverted deposits from new investors to pay prior investors, used proceeds from selling investments to pay unrelated investors, used investors’ funds as collateral for personal loans, used investors’ money to repay the loans, converted investor funds, and also outright stole $2.5 million of investor funds to purchase a waterfront home in Barrington, Rhode Island for Churchville. The SEC’s complaint alleges that Churchville performed deceptive acts and used misleading accounting tricks to conceal the fraud.
The SEC’s alleged that when ClearPath’s investors requested distributions of their investments in September 2013, Churchville lied to investors about the status, worth, and disposition of those investments. Four other entities: ClearPath Multi-Strategy Fund I, L.P., ClearPath Multi-Strategy Fund II, L.P., ClearPath Multi-Strategy Fund III, L.P., and HCR Value Fund, L.P. were named by the SEC as relief defendants.