The Securities and Exchange Commission (SEC) has accused an advisor and his company of running a scheme to invest $58 million that had harmed 300 investors. Robert Mueller, and the investment advisory firm Deeproot, of which Mueller is the sole proprietor, was allegedly acting as advisors to two pools of investment funds Mueller had established in 2014. According to a complaint published by the regulator last week.
Mueller and Deeproot are alleged to have convinced many investors, including retirees to invest in the funds using annuities or individual retirement accounts they had with other companies, between September 2015 and February 2021.
Mueller and his company told investors they would use their money to invest in life insurance policies, as well as Deeproot ventures for a “relatively secure return,” according to the regulator.
The SEC claims that Mueller and Deeproot contributed less than $10,000,000 of the $58 million they received from investors to purchase life insurance policies for these funds.
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They “used the vast majority” of the Funds assets. . . According to the regulator, it is like a piggybank to finance Mueller’s Deeproot-affiliated companies.”
The SEC claims that neither the investments nor the insurance policies generated any revenue or cash flow. This led to a $3.5million loss for investors on a $10m face value life insurance policy. When Mueller and Deeproot failed to pay for it, the SEC states.
According to regulators, the defendants also made Ponzi-like payments of more than $820,000 to investors in the past.
Mueller is alleged to have received salary payments of approximately $1.6 million from the fund between 2015 and 2020. This is despite the fact that Mueller claimed he did not receive any compensation from the fund, according to the SEC.
According to the complaint, the regulator seeks civil penalties, disgorgement and interest on ill-gotten gains, and permanent injunctions.