The Securities and Exchange Commission charged a former Pennsylvania investment advisor with orchestrating a fraudulent loan scheme, reports Wealth Management.
The allegations were contained in a complaint filed in federal court for the Eastern District of Pennsylvania against Joshua W. Coleman, the founder of Vesta Advisors in North Wales.
According to the SEC, “Coleman allegedly perpetrated the initial phase of his scheme by cumulatively pledging over $160 million in advisory client assets as collateral for personal loans without his clients’ knowledge or authorization.” As part of the scheme, he allegedly forged the signatures of clients and fabricated account statements. Banks agreed to give Coleman various loans based on his fabricated promises of clients’ assets and repayment agreements, the complaint said.
The commission said he took out six loans between December 2018 and June 2022 and raised a total of more than $200 million in illicit loan proceeds, and then diverted the money for his own use, including personal investments and paying business expenses.
The SEC said to repay clients whose assets were seized, Coleman obtained more loans by pledging his own securities as collateral. He allegedly deceived new lenders about the purpose of the loans and the value of certain collateral. Coleman was served with notices of default in June and July 2022 after lenders lost a total of $50 million.
Without admitting or denying the charges, Coleman agreed to a permanent injunction and a bar from serving as an officer and director for any public company with a class of securities. The SEC is also seeking disgorgements and civil penalties that will be determined by the court.
The attorneys at Lewitas Hyman are uniquely qualified to represent individual investors in investment-related claims against financial professionals and their firms. We understand how financial professionals and their firms are supposed to operate through decades of experience working for the SEC and firms like Morgan Stanley and UBS Financial Services. If you have suffered investment losses as a result of misconduct by your financial professional or their firms, contact Lewitas Hyman at (888) 655-6002 or through our online contact form for a free consultation.