Securities Industry Commentator by Bill Singer Esq

[B]eginning in approximately 2009, the defendant told victims that he required millions of dollars in supposed fees in order to access his extraordinary wealth abroad, which in turn could be used for financing.  During the scheme, the defendant and his co-conspirators sold promissory notes to victims, including through a financial-services marketing company based in Denver called Compass Financial Solutions (CFS).  The defendant and his co-conspirators falsely represented to their victims that their money would be used to pay for, among other things, bank transaction fees and tax penalties to the IRS.  To conceal the nature of their scheme, the defendant and his co-conspirators told victims to wire their funds into an attorney-trust account.  The funds from that account, however, were then sent to the defendant and his co-conspirators and spent on, among other things, repayments to other investors and personal expenses.  The evidence presented at trial showed that the defendant was not, in fact, wealthy and instead struggling to pay his personal debts.  The defendant's victims lost over $3 million to his fraud scheme.

After his son had been terminated by MSI and had become associated with another member firm, Murphy provided him with the files of approximately 87 of his son's former MSI customers. The MSI customer files contained "nonpublic personal information," such as account numbers, social security numbers, and birth dates, and Murphy acted without the knowledge or consent of MSI or any customer. Accordingly, Murphy caused MSI to violate Regulation S-P and thereby violated F1NRA Rule 2010. 

• Securities Industry Commentator
• Bill Singer