The allegations read: The securities and exchange commission (the "commission"), for its complaint against joseph michael todd ("todd"), todd financial services, llc ("tfs"), and tfs insurance services llc ("tfs insurance"), alleges that todd engaged in a fraudulent scheme and misappropriated at least $3 million from at least 20 customers of "broker a," a dually registered broker-dealer and investment adviser that employed todd as a registered representative. Todd obtained investor funds through deceptive means by instructing his broker a customers to write checks payable to his entities tfs and/or tfs insurance or to todd by falsely assuring customers that he and his entities would invest their funds in various securities. Instead, todd commingled investors' funds and kept the money for his own personal use, spending it on lavish real estate, boating, hunting, casinos, and adult entertainment. Todd perpetuated the fraud by making material misrepresentations to customers regarding the use of their funds in meetings that took place in person, in phone conversations, and in documents that he prepared and provided to customers. Because of their conduct, todd, tfs, and tfs insurance knowingly or recklessly committed securities fraud. Todd and tfs violated section 17(a) of the securities act of 1933 (the "securities act") and todd, tfs, and tfs insurance violated section 10(b) of the securities exchange act of 1934 (the "exchange act") and rule 10b-5 thereunder.
