SEC Obtains Default Judgment Against Former Broker Scott Fries Following Allegations of Defrauding Retail Investors

INVESTORS: The SEC obtained a default judgment against former broker and investment adviser for defrauding at least ten investors out of at least $458,000. 

On February 28, 2022, the U.S. District Court for the Southern District of Ohio entered a final judgment against Scott Allen Fries, a former Ohio registered representative and investment adviser, for defrauding at least ten investors out of approximately $458,000. 

According to the SEC, Fries raised at least $458,000 from at least ten investors between March 201 and March 2019. Instead of using the funds for investments, Fries used the money on personal expenses. To hide his fraudulent activities, Fries lied to the customers about the status of their investments, created and distributed fraudulent account statements that showed profitability, paid off a couple who discovered his scheme and lied to his employer about receiving the funds from his customers.

The judgment enjoined Fries from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Fries is ordered to pay disgorgement of $428,334.53 plus prejudgment interest of $110,548.02 and a civil penalty of $208,500.

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