Ernest Julius Romer III, of Sterling Heights, Michigan, a stockbroker formerly registered with Corecap Investments, has now been charged by the United States Securities & Exchange Commission with the theft of approximately $2.7 million from his customers. In the Matter of
ERNEST J. ROMER, III, ADMINISTRATIVE PROCEEDING File No. 3-19006 (Feb. 22, 2019)
According to the SEC Order:
The embezzlement counts of the criminal complaints to which Romer pled
no contest and to which he was convicted alleged, among other things, that as an agent, servant, or employee of certain named persons and/or being a trustee, bailee, or custodian of the property of such named persons, did convert to his own use or take or secrete with intent to convert to his ownuse, without consent of his principal, money or personal property of his principal having a value ranging from between $20,000 to $50,000 and/or $100,000 or more, that came into his possession or under his charge or control by virtue of his relationship with the principal.
In July 2017, we stated that Romer been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that he failed to provide FINRA with a response to its request for information about Romer’s business activities. Case No. 2017053029101 (Jul. 17, 2017).
Additionally, on September 13, 2017, Romer was fined $1,000,000.00 by the Corporations, Securities & Commercial Licensing Bureau of the State of Michigan Department of Licensing and Regulatory Affairs according to a Notice and Order to Cease and Desist containing findings that Romer engaged in securities fraud in violation of Securities Act, MCL 451.2501(c) Section 501(c). In the Matter of Ernest J. Romer III, Agency Nos. 332099, 332685, 332805 (Aug. 8, 2017).
According to the Order, several Corecap customers had been convinced by Romer to sell their securities in Corecap in order to invest with Romer away from the firm. Yet, the customers’ cash proceeds were never invested for their benefit; but rather, deposited into accounts controlled by Romer to be utilized for Romer’s personal benefit. The Order revealed that customer MR provided $190,000.00 to Romer from July of 2014 to April of 2016; customer GP provided $115,000.00 to Romer on January 5, 2015; and customer RK provided $46,000.00 to Romer in April of 2015. Evidently, MR, GP and RK all were under the impression that funds would be used by Romer for investment purposes; however, the customers were defrauded instead.
In July 2018, FINRA Public Disclosure revealed that since Romer has been barred, he has become the subject of eight customer initiated investment related disputes pertaining to allegations of his improper conduct.
All seem to allege that Romer converted the customer’s funds in regard to a bogus P&R Capital investment. Civil Action No. 2017-001829-NZ (July 18, 2017).
That number has now reached fifty. It also appears that CoreCap paid Romer’s customers in excess of $2.5 million to settle these claims.
Subsequently, a customer filed an investment related arbitration claim involving Romer’s conduct, in which the customer sought $50,000.00 in damages based upon allegations that the customers were solicited by Romer to invest in Corecap Solutions, but their funds had instead been converted by Romer. FINRA Arbitration No. 17-01082 (July 27, 2017). Thereafter, a customer filed an investment related arbitration claim regarding Romer’s activities, in which the customer requested $110,000.00 in damages based upon allegations of conversion pertaining to P&R Capital, and improper sales practices concerning the customer’s variable annuity purchase. Civil Action No. 2017-0028730CZ (Aug. 15, 2017).
Another customer lodged an arbitration claim against Romer, seeking $60,000.00 in damages supported by allegations that the customer’s funds were taken by him under false pretenses, where the customer has not received a return of her principal payment. FINRA Arbitration No. 17-01838 (Aug. 25, 2017). Additionally, a customer filed an investment related arbitration claim regarding Romer’s activities, wherein the customer sought $150,000.00 in damages supported by allegations of Romer’s theft of customer funds and the failure of the customer’s funds to be invested as promised concerning oil & gas products, variable annuities and loan arrangements. FINRA Arbitration No. 17-02255 (Aug. 28, 2017).
Furthermore, a customer filed an arbitration claim pertaining to Romer’s activities, where the customer requested $80,000.00 in damages based upon allegations that Romer borrowed the customer’s funds for the stated purpose of investing, but never invested the funds and neglected to return the money to the customer. FINRA Arbitration No. 17-01710 (Sept. 1, 2017). Then, a customer lodged an arbitration claim against Romer seeking $115,000.00 in damages founded on accusations against Romer of making false representations and effecting a faulty loan arrangement. FINRA Arbitration No. 17-02142 (Sept. 14, 2017). Moreover, a customer filed an arbitration claim requesting $250,000.00 in damages based upon allegations that Romer improperly took the customer’s funds to invest in two of his own companies. FINRA Arbitration No. 17-02794 (Oct. 23, 2017).
On January 20, 2017, Romer was fired by Corecap Investments, Inc. based upon allegations of unapproved client transactions and outside business activities.
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