SEC Bars Financial Advisor over Alleged Ponzi Scheme
The Securities and Exchange Commission (SEC) has barred a Tennessee financial advisor from the securities industry for his alleged involvement in a Ponzi scheme that took in approximately $5.5 million.
The SEC has accused 32-year-old Aaron Donald Vallett, a registered financial advisor in Brentwood, Tenn., of running a Ponzi-type scheme where he raised approximately $5.5 million from 19 investors. He allegedly ran his business through A.D. Vallett & Co. LLC and collected money from three unregistered pools while misrepresenting how the funds would be invested.
Unsuspecting investors were told that their money would be invested in securities and real estate. However, according to the SEC’s complaint, Mr. Vallett used a portion of the money for personal expenses, as well as to payoff previous investors. According to the settlement order, Mr. Vallett’s apparent Ponzi-type activity occurred between September 2008 and April 2010.
The SEC has announced that Mr. Vallett has agreed to being barred from the securities industry. This move would prohibit Mr. Vallett from working for an investment advisor or broker dealer.
Mr. Vallett neither admitted nor denied the SEC’s accusations against him, only agreeing to the injunction brought against him by the SEC in a civil complaint filed in a Tennessee state court.