U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23816 / April 26, 2017
Securities and Exchange Commission v. Thomas Edward Andrews and Scott Walter Christensen, No. 17-cv-00256 (D. Utah filed Apr. 5, 2017)
SEC Charges Two Individuals with Defrauding 23 Investors
The Securities and Exchange Commission charged a former registered representative of LPL Financial, LLC and his full-time personal assistant for defrauding 23 investors.
The SEC's complaint, filed in federal court in the District of Utah on April 5, 2017, alleges that from 2010 through the fall of 2015, Thomas Edward Andrews defrauded investors by convincing them to liquidate other investments and invest in "the Jackson Trust" and "the Lincoln." Andrews allegedly told investors that the "Jackson Trust" was guaranteed and had an annual return of 6% to 8.5%. He also allegedly claimed that the "Lincoln" investments would generate a return equal to 5% or the quarterly S&P index return, whichever was greater. The complaint alleges that the investments were fictitious and Andrews used the investors' funds to pay his personal expenses. Christensen allegedly assisted Andrews in the scheme by helping him create and mail false account statements and by pretending to be a "Jackson Trust" supervisor in calls to investors. Andrews allegedly misappropriated $8,384,253 from investors and paid Christiansen $1 million.
The SEC's complaint charges Andrews and Christiansen with 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 complaint also charges Andrews with violating Section 15(a)(1) of the Exchange Act for operating as an unregistered securities broker. The complaint seeks injunctive relief, disgorgement and civil penalties.
On December 15, 2016, Andrews pleaded guilty to securities and mail fraud and was subsequently sentenced to 97 months in prison and ordered to pay $8,384,253 in restitution. On July 26, 2016, Christensen pleaded guilty to securities fraud and making a false statement to a federal agent and was later sentenced to 12 months and 1 day in prison and ordered to pay $1 million in restitution.
The SEC's investigation was conducted by Alison Okinaka and Cheryl Mori of the Salt Lake Regional Office. The SEC's litigation will be led by Daniel Wadley and Amy Oliver.