The Massachusetts Secretary of the Commonwealth, William F. Galvin, issued an administrative complaint against Stephen S. Eubanks for operating a text book Ponzi scheme
According to the Complaint, since approximately October 2011, Eubanks presented himself as a successful hedge fund manager of Eubiquity Capital.
According to the Complaint, Eubanks, sold approximately $562,000 of his hedge fund to his friends, neighbors, and their families but rather than investing these funds, used $145,000 to finance his lifestyle, and another $140,000 to repay earlier investors.
Although the Complaint states that Eubanks was unregistered, in fact he was a registered representative of Bright Trading LLC of Las Vegas during the relevant period or from 2010 until August 2016. Eubanks also appears to be previously associated with American Express Financial Advisors, Smith Barney, UBS Financial, Bear Stearns Cos. and Oppenheimer & Co.
Bright Trading terminated Eubanks in August 2016, based upon the notion that he failed to disclose his outside business activities in Eubiquity Capital following an investigation by the Chicago Stock Exchange.
Bright Trading is however responsible for the supervision of Eubank’s conduct and business activities, branch offices to reasonably detect and prevent misconduct and the sale of unregistered securities. Courts and securities arbitration panels, in identical circumstances, have long held brokerage firms responsible for the conduct of their registered representatives in “selling away” cases based upon the broker-dealer’s failure to supervise.
In addition to its liability for the failure to supervise, Bright Trading may also be liable for Eubank’s conduct under common law agency principles, including respondeat superior, and as a “control person” pursuant to both Section 20(a) of the Exchange Act of 1934, 15 U.S.C. §78(t).
If you have invested with Eubiquity Capital or Stephen Eubanks, you should consult with a lawyer to determine your legal rights.
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
