SEC Charges N.Y. RIA and Principals in $138M Investment Fraud
The U.S. Securities and Exchange Commission has filed fraud charges against registered investment adviser A.G. Morgan Financial Advisors LLC and its principals, Vincent J. Camarda and James E. McArthur. The agency alleges the defendants orchestrated a massive offering fraud that raised at least $138 million from hundreds of “financially unsophisticated and elderly” clients between June 2020 and December 2023.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York has announced criminal charges against Camarda.
According to the complaint filed in the Eastern District of New York, Camarda and McArthur induced at least 431 investors to purchase promissory notes issued by five private equity funds they created, managed, and owned.
While the defendants allegedly pitched the funds as “conservative,” “secure,” and “low-risk,” the investments were actually highly speculative. Offering documents claimed the funds would invest in diverse areas. In reality, four funds invested entirely in a single high-risk mining venture called Millennium, and the fifth fund’s sole purpose was to finance a start-up coffee shop company, Buzz’d, owned by Camarda’s son.
The defendants allegedly failed to disclose that they received significant payments from the mining company for recommending the investment.
The SEC alleges that throughout 2023, Camarda personally misappropriated approximately $1 million by transferring client money directly to his personal bank account.
The scheme reportedly collapsed in January 2024 when both the mining and coffee shop companies defaulted on their obligations. The SEC estimates that investors have lost approximately $123 million in unreturned principal, with some victims losing their entire life savings.
Meanwhile, the defendants collectively received at least $2.97 million in undisclosed payments from the mining company, in addition to the funds Camarda allegedly stole.
The SEC’s complaint charges A.G. Morgan, Camarda, and McArthur with violating the registration and anti-fraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940.
The commission is seeking a final judgment that includes disgorgement of all ill-gotten gains plus prejudgment interest and significant civil money penalties, as well as barring the defendants from future violations of federal securities laws. Further, SEC is seeking to permanently enjoin Camarda and McArthur from participating in the issuance or sale of any security (excluding personal accounts) and from acting as investment advisers.
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