Susan G. Slovak has agreed to pay $25,000 to resolve Securities and Exchange Commission charges that she committed Texas securities fraud. Slovak, a former registered representative from Corsicana, is accused of misappropriating hundreds of thousands of dollars belonging to three customers.
According to the SEC, Slovak took more than $330,000 from an 83-year-old client. The commission says that she liquidated securities that were in this elderly man’s account, moved the money to her own accounts, and used the funds to pay for her own expenses. The SEC also says that in 2008, Slovak misappropriated about $144,000 from two other people’s accounts and moved those funds into the elderly client’s brokerage account.
Slovak reportedly told her supervisor Beth Chapman about her misconduct in August 2008. The branch manager is said to have responded by directing Slovack to buy back the securities in the clients’ accounts. In order to do this, Slovak allegedly made material misstatements and omissions to compliance staff. She also told one of the clients that she’d accidentally taken out the money.
The SEC is accusing Slovak of violating the antifraud provisions of the Investment Advisers Act of 1940 and the Securities Exchange Act of 1934. The SEC is accusing Chapman of misleading compliance staff about Slovak’s alleged misappropriation of client funds and failing to properly supervise and respond appropriately to Slovak’s Texas securities fraud. Chapman has agreed to settle SEC’s administrative charges for $25,000 and a bar from supervisory roles.
By agreeing to settle, Slovak and Chapman are not denying or admitting to the allegations against them. Slovak has also consented to the entry of a permanent injunction that bars her from violating Section 206 of the Advisers Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, as well as to an administrative order prohibiting her from associating with dealers, brokers, or investment advisers.
Related Web Resources:
SEC Charges Texas Registered Representative With Misappropriating Hundreds of Thousands of Dollars from Three Customers, Texas Securities Fraud, April 23, 2010
Read the SEC Complaint (PDF)
Please contact our Texas stockbroker fraud law firm to discuss your case.