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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23276 / June 3, 2015

Securities and Exchange Commission v. Mark F. Spangler and The Spangler Group, Inc., Civil Action No. 12-cv-856 (W.D. Wash. filed May 17, 2012)

Court Enters Judgments Against Seattle Fund Manager and Firm

The United States District Court in Seattle entered a final judgment against The Spangler Group, Inc., ending for now the Securities and Exchange Commission's trial court proceedings against former investment adviser Mark F. Spangler and his advisory firm.

In May 2012, the SEC charged Spangler and his firm with defrauding investment clients by secretly investing their money in two risky start-up companies that Spangler co-founded. The SEC alleged that Spangler, a former chairman of the National Association of Personal Financial Advisors, funneled approximately $47.7 million of client money into these private ventures. Spangler served as chairman and CEO of one of the companies, which is now bankrupt. These risky investments were inconsistent with the investment strategies that Spangler promised his clients and contrary to their investment objectives. According to the SEC's complaint, Spangler concealed his diversion of client funds for years. Spangler disclosed the misappropriation only after he placed his firm and the funds he managed into a state court receivership in 2011.

The U.S. Attorney's Office for the Western District of Washington filed parallel criminal charges against Spangler, who was convicted on 32 counts of wire fraud, money laundering, and investment adviser fraud in November 2013. In March 2014, Spangler was sentenced to 16 years in prison and ordered to pay nearly $20 million in restitution to his former investment clients. The court subsequently entered a default judgment against Spangler in the SEC action and ordered him to pay more than $4 million in disgorgement, prejudgment interest, and civil monetary penalties. Spangler is appealing his criminal conviction and the SEC judgment.

The assets of The Spangler Group are being liquidated by the court-appointed receiver, who has been distributing the proceeds to its creditors, including Spangler's investment clients. On behalf of the firm, its receiver agreed to resolve the SEC claims. Pursuant to the resolution, approved by both the state and federal courts, The Spangler Group will be enjoined against future violations of the securities laws.

The SEC acknowledges the assistance and cooperation of the U.S. Attorney's Office for the Western District of Washington, the Federal Bureau of Investigation, and the Internal Revenue Service in this matter.

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See also Litigation Release No. 22371 (May 18, 2012)

SEC Complaint

 

http://www.sec.gov/litigation/litreleases/2015/lr23276.htm


Modified: 06/03/2015