Stephen Skeffington Eubanks of Las Vegas Nevada a stockbroker formerly employed by Bright Trading LLC has been barred by Securities and Exchange Commission (SEC) from being a stockbroker or investment adviser or otherwise associating with securities broker dealers or investment advisories according to an Order Instituting Administrative Proceedings Pursuant to Investment Advisers Act of 1940 Section 203(f) and Securities Exchange Act of 1934 Section 15(b) based on Eubanks pleading guilty to fraud. In the Matter of Stephen S. Eubanks Administrative Proceeding File No. 3-18115 (Aug. 17, 2017).
According to the Order, SEC’s decision to bar Eubanks was primarily rooted in Eubanks pleading guilty to defrauding investors. Apparently, Eubanks flaunted to investors that he was an accomplished adviser who operated a hedge fund. Supposedly, Eubanks deceptively steered customers towards letting him invest their funds. Apparently, in at least two cases, agreements were drawn up between Eubanks and investors wherein Eubanks was made responsible for trading on the investors’ behalf.
Evidently, investors were also led by Eubanks to believe that Eubiquity Capital LLC – a company Eubanks created in February 2010 to facilitate customers’ investments – maintained associations with major securities broker dealers. Investors were also reportedly provided false information from Eubanks regarding his pooling of investors’ funds in a hedge fund partnership as well as his trading of options, index fund and stock trades.
The Order noted that customers’ funds were not invested according to their expectations. Rather, after Eubanks accumulated funds from investors, he reportedly allocated the funds into accounts under his control. Eubanks reportedly used investors’ money to address Eubanks’ personal debts and for paying previous investors returns owed to them.
Eubanks also reportedly disseminated false accounts statements to customers regarding the assets held in their Eubiquity accounts. Supposedly, the customers were provided statements reflecting balances Eubanks had in his own accounts or balances held in the accounts of other investors, precluding customers from accurately assessing their holdings.
Ultimately, between 2010 and 2016, an estimated thirty two investors were defrauded by Eubanks. Those investors reportedly sustained $437,609.35 in losses. Eubanks pleaded guilty to wire fraud; conduct violative of 18 U.S.C. § 1343. United States v. Eubanks Case No. 1:17-cr-10076-PBS (D. Mass. Apr. 11, 2017). Ultimately, Eubanks was sentenced to thirty months behind bars.
Eubanks has also been fined $75,000.00 and barred, along with Eubiquity, from registering or associating with any securities broker dealer or investment advisory in the Commonwealth of Massachusetts according to an Order issued by the Secretary of the Commonwealth of Massachusetts’ Securities Division based upon Eubanks’ conduct giving rise to the criminal fraud charges against him. In the Matter of Stephen S. Eubanks et al. Case No. E-2016-0084 (Apr. 16, 2017). Similarly, Eubanks has been barred by the Chicago Stock Exchange and ordered to pay $75,000.00 in fines founded on accusations of Eubanks’ engagement in a fraudulent scheme involving Eubiquity Capital LLC between May of 2016 and August of 2016. CHX-D-2017-05 (Dec. 20, 2017).
Financial Industry Regulatory Authority (FINRA) Public Disclosure confirms that Eubanks has been identified in four customer initiated investment related disputes containing allegations of his misconduct while employed with Oppenheimer Co. Inc. and Bright Trading LLC. In particular, on April 20, 2017, a customer filed an investment related complaint involving Eubanks’ activities where the customer sought $356,730.00 in damages based upon accusations that Eubanks caused the customer’s outside investment account to be depleted through his speculative, inappropriate trades and excessive commissions; and Bright Trading failed to supervise or otherwise monitor Eubanks’ activities.
Eubanks was discharged by Bright Trading LLC on August 26, 2016 supported by allegations of Eubanks’ failure to disclose an outside business activity – his ownership of Eubiquity Capital LLC.
