SEC Charges Scott Newsholme with Stealing Client funds for Gambling and Personal Expenses

According to a press announcement,the Securities and Exchange Commission has charged former advisor, Scott Newsholme with allegedly stealing more than $1 million from clients to support his gambling habit and other personal expenses.

The SEC alleges that Scott Newsholme of Farmingdale, New Jersey, falsified account statements, changed stock certificates, and purportedly forged promissory notes as part of a scheme in which he reportedly convinced clients seeking his financial planning advice to give him their money to invest in various securities.

According to the SEC’s complaint, he allegedly used investor money for personal expenses, gambling in Atlantic City, and Ponzi-like payments to clients who sought a return of their funds. Instead of investing clients’ money, Newsholme allegedly cashed their investment checks at a check-cashing store and purportedly pocketed the funds while assuring clients that their assets were safe and flourishing.

According to his FINRA BrokerCheck report , Newsholme was registered with SII Investments in Matawan, NJ from December 2008 until he was reportedly discharged in July 2014 following an internal investigation into a customer complaint where he allegedly falsely represented that he had transferred the client’s IRA funds from his previous broker-dealer to SII and made inconsistent statements during the investigation. FINRA barred Newsholme for failure to respond to its requests for information in 2014.

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