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SEC Charges ClearPath Wealth Management and Owner With Fraud

The Securities and Exchange Commission (SEC) has filed a suit against Patrick Churchville, and his firm ClearPath Wealth Management (“ClearPath Wealth”) misappropriated and misused his investors’ cash and assets through a fraudulent scheme involving theft that was covered up by false accounting entries, shadow accounts, and misrepresentations to his investors, financial institutions, to third-party administrators, and to ClearPath Wealth’s auditors and accountants.

According to the SEC, Mr. Churchville and his firm, ClearPath Wealth, caused over $11 million in losses to investors of the funds they advised and controlled. The SEC alleged that the defendants misallocated and misappropriated investor assets as part of a Ponzi-like scheme. According to the SEC, the defendants took monies that were due to be distributed to particular investors to pay for new investments to fund distributions to unrelated investors and themselves. The SEC alleged that Mr. Churchville’s home overlooking Narragansett Bay was bought with approximately $2.5 million stolen from investors.

The SEC also alleged that Mr. Churchville and ClearPath Wealth took part in many deceptive acts and fraudulent accounting entries to conceal their thefts and misappropriations from auditors, accountants, fund administrators and ClearPath Wealth staff. In September 2013, when fund investors requested distributions of their investments, the SEC alleged that Mr. Churchville prolonged the scheme by lying to investors about the status, worth and disposition of those investments.

The SEC further alleged that Mr. Churchville committed fraud in connection with the purchase or sale of securities in violation of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, fraud in the offer or sale of securities in violation of Section 17(a) of the Securities Act of 1933, and fraud in violation of Sections 206(1) and 206(2), and Section 206(4) of the Investment Advisors Act of 1940.

Attorney Pearce began his career at the SEC as an enforcement attorney more than 35 years ago. His SEC defense law practice clients have included public companies and their officers and directors, broker-dealers, investment advisors, and individuals being investigated in connection with their personal securities transactions. He has broad, extensive experience in matters arising from alleged 10b-5 fraud violations including, “insider trading,” Section 16(b) “short swing profit,” and Section 14 “proxy rule” violations as well as Section 9 “market manipulation” cases.

Have you have been contacted by the SEC or believe that you may be the subject of an SEC investigation? If so, call Mr. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce defends various individuals and entities who may be the subject of an SEC investigation or enforcement action regarding alleged involvement in securities laws violations.

This blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to representing investors and financial industry professionals throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.