U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25932/ January 25, 2024
Securities and Exchange Commission v. Jesus Rodriguez, No. 3:24-CV-00027 (W.D. Texas filed January 24, 2024)
SEC Charges Financial Advisor with Fraud for Stealing from Account Holders to Pay Personal Expenses
The Securities and Exchange Commission yesterday charged Jesus Rodriguez, a former financial advisor, with fraud for misappropriating more than $3.475 million from ten brokerage account holders and advisory clients.
The SEC’s complaint alleges that from 2014 to 2021, while employed as a registered representative and investment adviser representative in the El Paso office of a large financial institution, Rodriguez initiated more than 250 fraudulent and unauthorized disbursements from the accounts of ten of his brokerage customers and advisory clients. Rodriguez allegedly used the funds he misappropriated for personal expenses including to pay credit card bills, to buy automobiles, and to pay his family members. The SEC alleges that in many instances Rodriguez funded his misappropriations by incurring a debt for the account holder that was secured by the securities portfolios in their brokerage and/or advisory accounts. In other instances, Rodriguez allegedly misappropriated the proceeds of securities sales. The SEC further alleges that Rodriguez engaged in deceptive conduct to further conceal his misappropriation scheme, including by fabricating authorizations for the transfers and by lying to his employer when asked about certain transactions involving the affected accounts.
The SEC’s complaint, filed in the U.S. District Court for the Western District of Texas, charges Rodriguez with violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC seeks permanent injunctive relief, the disgorgement of allegedly ill-gotten gains plus prejudgment interest, and a civil penalty.
The SEC’s investigation, which is continuing, is being conducted by Nicholas Flath, Eric Kirsch, James Flynn, and Wendy Tepperman of the New York Regional Office, along with Jonathan Grant of the San Francisco Regional Office, and is being supervised by Tejal D. Shah of the New York Regional Office. Mr. Flath and Todd D. Brody will lead the litigation, with assistance from Jennifer D. Reece of the Fort Worth Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Western District of Texas and the Federal Bureau of Investigation.