Paul Wescoe Smith of Wayne Pennsylvania a stockbroker formerly employed by Bolton Global Capital has been barred by Securities and Exchange Commission (SEC) from being a stockbroker or investment advisor or otherwise associating with securities broker dealers or investment advisories according to an Order Instituting Administrative Proceedings containing findings of Smith committing securities fraud. In the Matter of Paul W. Smith Administrative Proceeding File No. 3-18470 (May 7, 2018).
Smith was previously charged by SEC in a Complaint alleging that about $2,350,000.00 had been raised by him from thirty investors as part of a fraudulent scheme. The customers were made to believe that their funds would be placed with The Haverford Group to invest in publicly traded securities. There were little securities transactions placed by Smith with the customer’s funds contrary to promises made by the stockbroker. The funds from newer investors were used by Smith to cover his own expenses or otherwise used to pay back previous investors; activities indicative of a Ponzi scheme.
Subsequently, Smith consented to a final judgement being entered against him which permanently enjoined him from engaging in conduct violative of Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, Securities Act of 1933 Section 17(a), and Investment Advisers Act Sections 206(1), 206(2) and 206(4) and SEC Rule 206(4)-8. SEC v. Paul W. Smith Civil Action No. 17-5480 (E.D.P.A. Dec. 7, 2017). In a criminal action that followed, Smith pleaded guilty to committing securities fraud (15 U.S.C. § 78j(b)) and mail fraud (18 U.S.C. § 1341). United States v. Paul W. Smith Criminal Action No. 2:17-626 (May 4, 2018). He was sentenced to five years in prison.
Smith has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he obstructed a FINRA investigation into allegations of his private securities transactions. Smith specifically neglected to provide information or documentation to FINRA personnel by deadlines FINRA imposed. FINRA was made aware from Smith’s legal counsel that Smith refused to participate in the investigation. FINRA found Smith’s conduct violative of FINRA Rules 2010 and 8210.
FINRA Public Disclosure reveals that Smith has been identified in sixteen customer initiated investment related disputes pertaining to accusations of his misconduct while employed with Bolton Global Capital. Specifically, a customer initiated investment related arbitration claim involving Smith’s activities was settled for $15,000.00 in damages founded on allegations that between January of 2016 and February of 2016, the customer had been defrauded by investing in The Haverford Group because of Smith. FINRA Arbitration No. 17-01753 (June 13, 2018).
Smith is referenced in another customer initiated investment related arbitration claim which was resolved for $11,375.00 in damages based upon accusations of fictious investments being sold to the customer, and the customer’s funds being converted for Smith’s own benefit. FINRA Arbitration No. 17-02564 (June 14, 2018). On July 17, 2018, another customer initiated investment related complaint involving Smith’s conduct was settled for $30,000.00 in damages supported by allegations that Smith effected securities transactions away from Bolton Global Capital without the securities broker dealer’s knowledge or consent; and the customer fell victim to the fraudulent Haverford Group scheme because of Smith’s actions.
In addition, a customer initiated investment related arbitration claim in regard to Smith’s activities was resolved for $18,750.00 in damages founded on accusations of a fraud being committed against the customer by making an investment club investment. FINRA Arbitration No. 18-02339 (Dec. 11, 2018). Smith is also the subject of a customer initiated investment related arbitration claim where the customer sought $117,500.00 in damages based upon allegations that the customer was sold fraudulent investments by Smith. FINRA Arbitration No. 18-00075 (Aug. 1, 2018).
Smith was discharged by Bolton Global Capital on February 2, 2017 supported by accusations of his unapproved and undisclosed private securities transactions.