Manuel A. Romero – Ponzi Scammer Caught By The SEC (2023)
On April 25, 2022, the Securities and Exchange Commission obtained a final judgment against the former Chief Financial Officer of a Marin County, California real estate investment and management company for his role in a Ponzi scheme that defrauded investors.
Manuel A. Romero, former CFO of a real estate investment, was caught for his involvement in a Ponzi scam.
A prominent Ponzi schemer named Manuel A. Romero was recently apprehended by the Securities and Exchange Commission (SEC). Manuel A. Romero has been defrauding investors of their money for a number of years. The SEC has achieved a big victory as a result of the arrest, which serves as a warning to potential con artists who are interested in defrauding investors.
The Context of the Investigation
Manuel A. Romero, a man who lived in Florida, had been operating a Ponzi scheme for a number of years, during which he assured investors that their money would yield great returns if it was invested in one of his businesses. However, instead of investing the funds as promised, Manuel A. Romero utilized the money for personal needs such as purchasing a boat, private aircraft, and luxury automobiles. He also repaid earlier investors who had invested in the company.
Manuel A. Romero had been able to successfully bring in new investors over the course of the scheme’s many years of operation because of a referral and promotion network he maintained. On the other hand, the SEC started looking into Romero’s enterprises in 2021 and discovered evidence of fraud as well as the theft of investor money.
The Investigation Conducted By The SEC
During the course of their inquiry, the SEC discovered that Manuel A. Romero had collected over 110 million dollars from over 700 investors located in a variety of jurisdictions. It was claimed that the monies were invested in a variety of businesses, such as a seaside resort and a gold mine; however, the purported investments were fake and did not come to fruition.
The Securities and Exchange Commission discovered evidence that Manuel A. Romero had diverted cash from investors to pay for personal costs, such as the purchase of a yacht worth $2.5 million, expensive cars, and other extravagant items. In addition, Romero had lied to investors about his investment experience and credentials by claiming to have worked for prominent investment firms and owning advanced degrees while in reality, he did not have either of these things. Romero had misled investors.
The Apprehension and Its Repercussions
After amassing a significant amount of evidence against Manuel A. Romero, the SEC decided to take legal action against him and arrested him on multiple counts of violating federal securities laws. Since that time, Romero has entered a guilty plea to the allegations, and as a result, he is required to make restitution to his victims, in addition to fines and penalties imposed by the SEC.
The acts of Romero have led to substantial repercussions, not just for the people Manuel A. Romero wronged, but also for the larger financial community as a whole. Ponzi schemes and other types of investment fraud weaken public trust in the nation’s monetary system and have the potential to do enormous harm to individual investors as well as the economy as a whole.
The SEC’s complaint, filed on March 31, 2022, in the U.S. District Court for the Northern District of California, alleged that from October 2016 through May 2020, Marin, California resident, Manuel A. Romero falsified financial statements provided to investors and made fraudulent cash transfers as part of a Ponzi scheme operated by Professional Financial Investors, Inc. (“PFI”) and its now-deceased founder and former president. The SEC alleged that PFI and related entities raised hundreds of millions of dollars from investors by falsely telling them their money would be used primarily to purchase real property and make improvements to real property owned by PFI and its related entities.
Instead, according to the complaint, a substantial portion of investor funds was used to pay previous investors or to cover operating losses. The SEC alleged that Manuel A. Romero played a key role in carrying out the Ponzi scheme by commingling investor funds across the various PFI entities’ bank accounts and making distributions to existing investors from new investor funds.
The SEC’s complaint charged Romero with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. Without admitting or denying the SEC’s charges, Romero consented to the court’s order that permanently enjoins him from violating these provisions and bars him from serving as an officer or director of a public company. Romero also agreed to pay a disgorgement of $91,819 with prejudgment interest of $6,655 and a civil penalty of $50,000.
The SEC’s investigation was conducted by Mike Foley with the assistance of Brent Smyth, under the supervision of Tracy L. Davis and Monique C. Winkler of the San Francisco Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of California and the Federal Bureau of Investigation.
Catch reports on investments, finance advisers, CEOs, and scams in our latest news section.