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Archive for November, 2015


Stockbroker Stole Investor Money for Home Renovations

The SEC alleges that Bernard M. Parker raised more than $1.2 million from his longstanding brokerage customers and others who were told they were purchasing legitimate real estate tax lien certificates and would earn returns of six to nine percent annually.  However, Parker only used a small amount of investor funds to purchase tax liens and instead used their money to remodel his home in Indiana, Pa., make car payments, and pay bills for his father-in-law.

“We allege that while Parker was using investor funds for his personal expenses, he provided investors with computer printouts of vacant lots or homes and falsely told them that his company held liens on those properties,” said Sharon B. Binger, Director of the SEC’s Philadelphia Regional Office.  “Once he gained their trust, investors gave Parker thousands of dollars apiece for purported investments, and he swiftly stole their money.”

In a parallel action, the U.S. Attorney’s Office for the Western District of Pennsylvania announced criminal charges against Parker.

According to the SEC’s complaint filed in federal court in Pittsburgh:

  • Parker conducted the unregistered and fraudulent offering from 2008 to 2014 through his company Parker Financial Services.
  • Parker was a registered representative associated with a dually-registered broker-dealer and investment advisory firm to which he did not disclose this side business.
  • Parker induced investors to purchase the securities by making materially false and misleading statements and omissions about his actual use of investor funds.
  • Parker told prospective investors that Parker Financial Services would use their funds to purchase tax liens placed by municipalities on properties primarily in Florida, Arizona, and Colorado.
  • Parker pooled the money he raised from investors into several bank accounts, and when he cashed investors’ checks he routinely deposited a portion of the money into a bank account and took the remainder in cash.
  • Parker withdrew more than $650,000 in investor funds in cash from teller transactions, ATM withdrawals, and checks cashed at local supermarkets.  He additionally spent approximately $197,000 of investor money in point-of-sale transactions, $150,000 through personal checks, and $169,000 for online bill payments.
  • Parker also made approximately $188,000 in purported interest payments to earlier investors in an effort to keep his scheme from being discovered.

The SEC’s complaint charges Parker with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 as well as Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.  The SEC seeks disgorgement plus prejudgment interest and penalties as well as a permanent injunction.

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