Former Investment Adviser Charged by SEC for $200 Million Fraudulent Scheme

Litigation Release Number 25633/February 6, 2023

Securities and Exchange Commission, v. Joshua W. Coleman (No. 2:23-cv-00459 (E.D. Pa. filed on February 6, 2023)

The Securities and Exchange Commission filed charges against Joshua W. Coleman a former investment advisor from North Wales in Pennsylvania. Coleman is accused by the Securities and Exchange Commission of orchestrating a fraud scheme which allowed him to receive over $200 million illicit loan proceeds.

Coleman, according the SEC’s complaint engaged in six consecutive loans transactions between December 2018, and June 2022. The SEC claims that Coleman diverted the money to his personal use. This included financing personal investment and paying business expenses. Coleman’s scheme, according to the complaint, involved various misconducts, including forging signatures, misleading advisory customers, and fabricating or altering emails, statements of bank accounts, and other documents.

Coleman allegedly used over $160,000,000 in assets of advisory clients to secure the loans. Coleman’s lender seized a portion these assets after Coleman defaulted. Coleman secured additional loans to repay his clients by using his own securities as collateral. According to the SEC, Coleman misled new lenders as to the purpose of loans and value of collateral pledged. Coleman defaulted in these loan transactions, and owes more than $50 million.

Coleman, in response to SEC’s complaints, has agreed to an proposed judgment, which includes a permanent bar and an officer-and director bar, subjected to court approval. Coleman has left the determination of the disgorgement amount and civil penalty to the court. Coleman has also agreed to penny and associational stock bars in a follow-up administrative proceeding.

Matthew Homberger and Brian Higgins from the Philadelphia Regional Office conducted SEC’s investigations. The investigation began after Eric Elefante referred the matter to Scott Fisher, Daniel Faigus and Brian Carroll of Division of Examinations. Karen Klotz, Gregory Bockin and others will lead the litigation.

This case highlights SEC’s commitment to uncovering, and prosecuting, fraudulent schemes in securities. Coleman’s alleged misconduct did not only harm his clients, but also undermined integrity of the financial systems. The SEC is committed to pursuing enforcement actions in order to protect investors, maintain fairness and transparency on the market and to protect the integrity of the financial system.

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SEC

Securities and Exchange Commission is the regulatory agency that enforces and oversees securities laws in the United States. The main goal of the SEC is to protect investors and maintain fair, efficient, and transparent markets. This is achieved by the SEC requiring that companies disclose relevant financial data to the public and regulating brokers and securities exchanges. The SEC also investigates, prosecutes, and punishes individuals or companies engaged in fraudulent practices or manipulations in the securities markets. The SEC is crucial in maintaining the integrity of U.S. Financial Markets.

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