Massachusetts Regulator Charges Ex-Investment Adviser Over $500K Ponzi Scam

The Secretary of the Commonwealth of Massachusetts has charged Stephen S. Eubanks over his alleged involvement in a Ponzi scam. According to state securities regulator William F. Galvin, the former investment adviser took at least $529K from 15 investors, including neighbors, friends, and their families. Four of the investors were Massachusetts investors who gave $195K of the funds.

According to the state’s complaint, in 2011, Eubanks allegedly pretended he was a successful hedge fund manager who ran Eubiquity Capital LLC. He solicited investors to get them to invest their money in options, stocks, and other securities. However, instead of investing their funds, he allegedly used $145K for his own expenses, including trips to Martha’s Vineyard and to cover boat costs, and $140K to pay back earlier investors.

Galvin’s notice said that Eubanks lost all of the investors’ money. Many of the investors were close friends of Eubanks, including an ex- college roommate and the older father of a former fraternity brother. He befriended the other investors online.

To hide the scheme, Eubanks allegedly gave false reports to investors to make it appear as if their money was invested as they’d intended and making them substantial profit. During testimony under oath in front of Massachusetts’s Enforcement Section, Eubanks allegedly tried to hide his illegal activities.

The state said that Eubanks remains a “substantial risk” to investors.

It was the Chicago Stock Exchange that opened an investigation after Eubanks did not report Eubiquity Capital. From 3/2010 to 8/2016, which was when he was fired because of the investigation, Eubanks was registered as an adviser with Bright Trading. His BrokerCheck record also notes that he previously worked with Oppenheimer & Co. (OPY), Bear Stearns & Co., UBS Financial Services (UBS), Smith Barney, American Express Financial Advisors, and IDS Life Insurance. He left Oppenheimer after he was the subject of a customer complaint. According to his broker record,  there have been at least two other complaints against him in the past.

Now, investors want their money back from Eubank’s Ponzi scam. Meantime, Galvin’s office is seeking for Eubanks and his firm to cease and desist from continuing to commit the alleged violations. He is also demanding that they provide an accounting of losses tied to the alleged wrongdoing and pay restitution to investors, rescission to Commonwealth residents that bought securities involved in the alleged violations, and disgorgement of related profits.

Please contact our Ponzi scam fraud law firm today.