SEC Charges Unlicensed Broker With Defrauding Investors

The Securities and Exchange Commission today charged Joshua L. Rupp of Michigan for engaging in securities fraud and for acting as an unregistered broker-dealer. 

The SEC’s complaint, filed in the U.S. District Court for the Western District of Michigan, alleges that Rupp engaged in a fraudulent investment scheme from January 2018 through July 2019 which included misstatements, false documents and misappropriation of investor funds.  According to the complaint, Rupp raised over $2.2 million from about 20 investors who lacked significant investment experience by misrepresenting that he was a licensed securities professional, he would generate profits for investors by trading on their behalf, and investors’ principal was protected from losses.  In addition, Rupp allegedly provided investors fake documents purporting to show he was associated with a licensed broker-dealer, and false account statements and trading data to make it appear that his trading on their behalf was generating as much as 115 percent increase in value. 

The complaint further alleges that, in reality, Rupp was not affiliated with any brokerage firm or licensed in the securities industry, his securities trading resulted in significant losses, and he misappropriated and misused hundreds of thousands of dollars of investor funds.  Investors allegedly lost most of their money, including retirement funds, through Rupp’s fraud. 

“As alleged in the complaint, Rupp solicited Main Street investors and depleted their retirement savings by using fake credentials and false documents showing extremely high returns,” said Jennifer S. Leete, Associate Director of the SEC Enforcement Division.  “Investors can check an investment professional’s qualifications through our Investor.gov website.”

The SEC’s complaint charges Rupp with violating the antifraud provisions of the federal securities laws and acting as an unregistered broker, and seeks disgorgement of ill-gotten gains plus interest, a penalty, and injunctive relief.

The SEC’s investigation was conducted by Gosia Spangenberg, Ian Dattner and Donato Furlano with assistance from Brian Shute.  The investigation was supervised by Ms. Leete and Lisa Deitch.  The litigation is being handled by Derek Bentsen and Stephan Schlegelmilch.