The SEC has issued an Order instituting administrative and cease-and-desist proceedings against former broker Gary M. Arford (CRD# 2440941).
According to the SEC, Arford served as an investment adviser for a private fund from December 2010 until October 2013. During this time, he was registered with the brokerage firm Geneos Wealth Management, Inc. in Lynnwood, Washington. Arford allegedly defrauded investors and the fund in multiple ways. The SEC allegations include:
- Inducing the private fund to invest $4 million in a company that had supposed plans to build and operate a hotel in Seattle on an undeveloped land. Arford allegedly misrepresented or concealed material facts regarding substantial debt of the company and encumbrances on its undeveloped property.
- Taking control of the undeveloped property and used it as collateral for personal debts.
- Inducing the fund to continue the investment by failing to inform the fund of the personal ownership and use of the undeveloped property, as well as misrepresenting and concealing the use of the fund’s assets regarding the project.
- Misappropriating assets from the fund for expenses unrelated to the intended investment.
Arford’s regulatory report also reflects that he has been the subject of ten customer disputes since 2004 and has been terminated from two brokerage firms. Four of the customer disputes are currently pending.
In response to the SEC Order, Arford submitted an Offer of Settlement imposing sanctions which the Commission has decided to accept. The sanctions include a permanent bar from Arford having any association with a broker-dealer or investment advisor and a total of $4,247,940 in disgorgement and civil penalties.
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