SEC Charges Operator of Ponzi Scheme Targeting Retail Investors

Litigation Release No. 24173/ June 21, 2018

Securities and Exchange Commission v. James E. Hocker, No. 18-cv-01251 (M.D. Pa. filed June 21, 2018)

The Securities and Exchange Commission has charged a Bellefonte, Pennsylvania insurance agent with engaging in a Ponzi scheme that targeted retail investors who lacked significant investment experience.

According to the SEC's complaint, from at least 2010 through 2017, James E. Hocker began his relationship with a number of investors by selling them insurance. After allegedly gaining their trust, he encouraged them to invest with him by falsely promising guaranteed returns of between 10% and 30% from investments he would make on their behalf in the S&P 500 and other unspecified investment vehicles. Some investors allegedly withdrew money from their life insurance policy or retirement accounts to fund their investment with Hocker. In fact, Hocker did not invest any of the investors' funds. Instead, he pocketed the money and used it for his personal living expenses such as credit card bills and to make payments to other investors. Over the last five years, Hocker raised approximately $1.27 million from about 25 investors. The investors were largely elderly retirees or individuals nearing retirement, without significant investment experience. Some of Hocker's investors were widows who relied on Hocker to manage their money following the death of their husbands.

The SEC's complaint, filed in the U.S. District Court for the Middle District of Pennsylvania, charges Hocker with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks an injunction, disgorgement and penalties.

The SEC's investigation was conducted by Breanne Atzert, under the supervision of Lisa Deitch and Antonia Chion. The litigation will be led by Paul Kisslinger and supervised by Cheryl Crumpton. The SEC appreciates the assistance of the U.S. Attorney's Office for the Middle District of Pennsylvania, the Federal Bureau of Investigation, and the Pennsylvania Department of Banking and Securities.