SEC Obtains Final Judgement Against Connecticut Investment Adviser Who Misappropriated Funds from Clients

Litigation Release No. 25078 / April 21, 2021

Securities and Exchange Commission v. Lester Burroughs, Civ. Action, o. 3:19-cv-01913 (D. Conn. filed December 4, 2019)

The Securities and Exchange Commission today announced the entry of a final judgment against former Connecticut investment adviser Lester Burroughs.

The SEC's complaint, filed on December 4, 2019, alleged that Burroughs engaged in a scheme to defraud retail investors by selling fictitious financial products and misappropriating the proceeds to pay other advisory clients, as well as for his own use.

In a parallel action, the U.S. Attorney's Office for the District of Connecticut announced Burroughs pleaded guilty to one count of wire fraud. On April 16, 2020, Burroughs was sentenced to 33 months of imprisonment, followed by three years of supervised release, and ordered to pay restitution of $575,000 to his victims.

On April 21, 2021, the U.S. District Court for the District of Connecticut entered a final judgment by consent against Burroughs. Pursuant to the final judgment, Burroughs, without admitting or denying the allegations in the SEC's complaint, was permanently enjoined from violating the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The judgment against Burroughs also orders him to pay disgorgement of $560,000. The disgorgement order is deemed satisfied by the criminal restitution order.

The Commission previously issued an order barring Burroughs from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal adviser, transfer agent, or nationally recognized statistical rating organization, as well as participating in the offering of a penny stock.

The SEC's case was handled by Robert Baker, Martin Healey, John McCann, and Lawrence Pisto of the SEC's Boston Regional Office. The SEC appreciates the assistance of the Federal Bureau of Investigation and U.S. Attorney's Office for the District of Connecticut.