A Marietta investment adviser used at least $2 million from clients to pay child support and alimony, fund luxury trips and pay other personal expenses, according to federal securities regulators in a federal lawsuit.
A federal judge in Atlanta recently granted a Securities and Exchange Commission request to freeze the assets of Paul Marshall, 48, and several investment companies he controls, including Bridge Securities LLC and Bridge Equity Inc. An SEC lawsuit filed in U.S District Court accuses Marshall of multiple counts of fraud. Another company associated with Marshall, FOGFuels Inc., described as an alternative energy company, also is named in the suit.
Efforts to reach Marshall and his companies for comment were unsuccessful Monday.
The SEC said Marshall began founding his companies in December 2010 after having worked for broker-dealer and investment adviser firms for more than 20 years. He and his companies had received about $3 million from eight Bridge clients by April 2011 and the SEC said he was still receiving money as recently as this past July, according to the lawsuit.
The suit said Marshall misappropriated clients’ funds after having them transfer funds to bank accounts under his control and telling them their money would be used to purchase securities, including JP Morgan mutual funds and certificates of deposits.
He created “fictitious periodic account statements” on Bridge letterhead that also showed non-existent returns, the suit said.
The SEC said that between April 2011 and July 2013 Marshall used about $2 million of clients’ funds for personal expenses, while also soliciting new investors. In addition to trips and alimony, some of the money was used to pay for private school tuition and camps for his children and some was transferred to his current wife, the suit said.
The federal judge in the case, Timothy Batten Sr., also has ordered an accounting of Marshall’s businesses. The SEC’s suit demands Marshall return the funds and be assessed civil penalties, but no figures were provided in the suit.
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