SEC Charges Ohio Investment Adviser with Misappropriating Over $1.3 Million from a Retail Investor

The Securities and Exchange Commission (SEC) took legal action against Patrick Thayer from Cincinnati, Ohio. Thayer, who was once a double-registered agent and financial advisory representative, stands accused of illicitly appropriating over $1.3 million from a client he advised.

According to the SEC’s lawsuit, Thayer covertly set up an account in a client’s name in November 2013. He kept control over the account and regularly moved client assets to it without their consent. These funds were then utilized to cover his personal expenditures, including his mortgage payments. The lawsuit further claims that Thayer carried out this misconduct for nearly ten years, secretly diverting over $1.3 million by occasionally selling the client’s securities to facilitate transfers into the hidden account.

The SEC filed its lawsuit in the U.S. District Court for the Southern District of Ohio, Western Division. It accuses Thayer of contravening the anti-fraud stipulations of several statutes and regulations, including Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 enacted under it, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Thayer has consented to a partial settlement without admitting or denying the accusations. He has agreed to a permanent injunction against future violations of the mentioned provisions and has consented to pay an as-yet undetermined amount of monetary relief, the specifics of which will be set by the court upon the SEC’s request at a subsequent date. This settlement awaits the court’s approval.

Kyle Bradley conducted the SEC’s investigation, overseen by Natalie Brunson and Justin Jeffries from the Atlanta Regional Office. The ensuing litigation will be directed by Robert Schroeder, under the guidance of Graham Loomis.