SEC Charges Pennsylvania Investment Adviser with Multi-Million Dollar Fraud

Litigation Release No. 25633 / February 6, 2023

Securities and Exchange Commission v. Joshua W. Coleman, No. 2:23-cv-00459 (E.D. Pa. filed Feb. 6, 2023)

The Securities and Exchange Commission charged Joshua W. Coleman, resident of North Wales, Pennsylvania and former investment adviser, for perpetrating a fraudulent scheme that yielded him over $200 million in illicit loan proceeds.

According to the SEC's complaint, Coleman entered into six successive loan transactions between December 2018 and June 2022 and diverted the proceeds for his personal use, including financing personal investments and paying outstanding business expenses. Coleman's scheme allegedly involved a wide range of misconduct, including forging signatures on loan documents, lying to advisory clients, and fabricating and altering emails, bank statements, and other documents. The complaint alleges that Coleman obtained the initial loans in part by pledging as collateral over $160 million in advisory client assets, a portion of which were seized by Coleman's lender after Coleman defaulted. The complaint further alleges that, to repay these clients, Coleman procured additional loans by pledging his own securities as collateral while misleading his new lenders concerning the purpose of the loans and the value of certain pledged collateral. According to the complaint, Coleman defaulted on those loan transactions and owes over $50 million in proceeds.

The SEC's complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania, charges Coleman with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, as well as Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 promulgated thereunder. Without admitting or denying the SEC's allegations, Coleman has agreed to the entry of a judgment, subject to court approval, imposing a permanent injunction and an officer-and-director bar, while reserving the issue of disgorgement and a civil penalty for further determination by the court. Coleman also has agreed to the imposition of associational and penny stock bars as part of a settled follow-on administrative proceeding.

The SEC's investigation was conducted by Matthew Homberger, Brian Higgins, and Brendan McGlynn, each of the Philadelphia Regional Office. The investigation resulted from a referral by Eric Elefante, Scott Fisher, Daniel Faigus, and Brian Carroll of the Division of Examinations. The litigation will be led by Karen Klotz and Gregory Bockin.