SEC Charges Former Florida Brokerage Representative with Defrauding Senior and Disabled Customers

The Securities and Exchange Commission (SEC) has taken action against Joseph Michael “Mike” Todd, along with his entities Todd Financial Services, LLC (TFS) and TFS Insurance Services LLC (TFS Insurance), for defrauding at least 20 brokerage customers and misappropriating a minimum of $3 million.

According to the SEC’s complaint, Todd, who worked as a registered representative and investment adviser representative at a dual-registered broker-dealer and investment adviser, engaged in deceptive practices to obtain investor funds. He instructed his brokerage customers to write checks payable to TFS, TFS Insurance, or Todd, falsely assuring them that he and his entities would invest the funds in various securities. However, Todd diverted the investors’ money for personal use, spending it on real estate, boating, hunting, casinos, and adult entertainment. To conceal his scheme, Todd presented forged account statements or portfolio holdings statements to defrauded customers, containing falsified entries indicating their investments in the promised products. The complaint alleges that many of Todd’s victims were seniors and/or disabled individuals. Additionally, Todd made Ponzi-like payments to one customer, using funds from other customers’ accounts, falsely claiming they were interest payments or regular distributions from an investment.

The SEC’s complaint, filed in the Middle District of Florida, charges Todd and TFS with violating the antifraud provisions of the Securities Act of 1933, specifically Section 17(a). Todd, TFS, and TFS Insurance are also charged with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The SEC seeks disgorgement, civil penalties, permanent injunctions, and conduct-based injunctions against the defendants, along with a permanent officer-and-director bar for Todd.

To settle the charges, Todd, TFS, and TFS Insurance have consented to injunctive relief and the officer-and-director bar for Todd, without admitting or denying the SEC’s allegations. They have also agreed to pay disgorgement, prejudgment interest, and civil penalties, the amounts of which will be determined by the Court at a later date upon an SEC motion.

The SEC’s investigation, which is still ongoing, involved Caryn Trombino, Larry Brannon, Neal Jacobson, and Ellen Lynch, and was supervised by Jeffrey Shank of the Chicago Regional Office. The litigation will be led by Daniel Hayes.

The SEC acknowledges the assistance provided by the Financial Industry Regulatory Authority (FINRA) in this matter.