The allegations read: The united states securities and exchange commission ("sec") alleges that the sec brings this civil law enforcement action to address defendant ernest j. Romer, iii's ("romer") multi-million-dollar securities fraud. From approximately 2014 through 2016, romer defrauded at least 30 of his retail brokerage customers out of approximately $2.7 million. During that time period, romer worked as a registered representative associated with corecap investments, inc., a registered broker-dealer with the sec ("corecap investments").
romer persuaded at least 30 of his customers to sell securities in their corecap investments accounts and transfer the proceeds to either p&r capital, llc ("p&r capital") or corecap solutions, llc ("corecap solutions"). Romer represented to customers that upon transferring money to p&r capital and corecap solutions, he would invest their money in the stock market and earn them a better return than their current investments. Based on romer's representations, the customers understood that corecap solutions and p&r capital were affiliated with corecap investments.
romer's statements to his customers were false. P&r capital and corecap solutions were romer's personal businesses and had no relationship to corecap investments. Romer did not invest the customers' money in the stock market for their benefit. He instead stole the money for his own personal use. Romer commingled approximately $2.7 million of customer funds with his advances from corecap investments and other sources for a total of approximately $4.4 million. Of that, romer used approximately $3.5 million for trading in his personal brokerage accounts, paid approximately $714,000 to cover his personal expenses, paid approximately $343,000 to customers of his prior brokerage firms, paid approximately $302,000 to customers of corecap investments, and transferred approximately $41,000 to family members.
by engaging in this conduct, romer violated section 17(a) of the securities act of 1933 ("securities act") and section 10(b) of the securities exchange act of 1934 ("exchange act") and rule 10b-5 thereunder.
