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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23100 / September 30, 2014

Securities and Exchange Commission v. Dennis F. Wright, Civil Action No. 1:14-cv-01896-SHR

SEC Charges Pennsylvania-Based Registered Representative with Stealing Funds from Customers

On September 30, 2014, the Securities and Exchange Commission charged Dennis F. Wright, a former registered representative based in Lewistown, Pennsylvania, with defrauding his customers by stealing their funds for his personal use and falsifying their account statements to cover up his fraud.

According to the SEC's complaint filed in U.S. District Court for the Middle District of Pennsylvania, Wright misappropriated more than $1.5 million from at least 28 customers. Wright fraudulently induced his customers to redeem securities held in their securities accounts, including variable annuities and mutual funds, by falsely representing that he would invest the proceeds from the redemptions in a managed account that held other securities that yielded higher returns than their existing securities accounts. Instead, Wright deposited his customers' funds in a bank account he controlled and from which he misappropriated the funds in order to pay his personal expenses as well as to fund customer withdrawals. Wright concealed his fraud by providing his customers with falsified account statements purportedly showing that they had purchased and owned interests in the non-existent managed accounts with appreciating balances.

In a parallel action, the U.S. Attorney's Office for the Middle District of Pennsylvania announced criminal charges against Wright.

Wright has agreed to settle the SEC's charges and disgorge his ill-gotten gains, which will be deemed satisfied by the entry of an order of restitution in the criminal case. He also consented to the entry of an order permanently enjoining him from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The settlement is subject to court approval.

As part of the settlement, and following the entry of the proposed final judgment, Wright has consented to the entry of a Commission order, pursuant to Exchange Act Section 15(b)(6) and Section 203(f) of the Investment Advisers Act of 1940, permanently barring him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and barring him from participating in any offering of a penny stock.

The SEC's investigation was conducted by Kingdon Kase, Paulina L. Jerez, and Dustin Ruta of the Philadelphia Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Middle District of Pennsylvania and the Federal Bureau of Investigation in this matter.

 

http://www.sec.gov/litigation/litreleases/2014/lr23100.htm


Modified: 09/30/2014