SEC headquarters in Washington. (Photo: Shutterstock)
The Securities and Exchange Commission on Friday filed an emergency action and obtained a temporary restraining order and asset freeze against a California-registered investment advisor and his entities to halt an ongoing Ponzi scheme targeting senior citizens in Southern California.
According to the SEC's complaint, from at least January 2018 through the present, Paul Horton Smith Sr. offered and sold securities in his company Northstar Communications, and used his investment advisory firm eGate and insurance and estate planning company Planning Services Inc. to market the securities.
Smith and Northstar assured investors that their principal would be safe and secure invested in purported "private annuity contracts," and they promised investors guaranteed annual interest payments between 3% and 10.5%.
In reality, "Smith's and Northstar have not invested any investor funds in any securities, their representations to investors were false and misleading, and omitted material information," the complaint states.
Smith continues his fraud. Since the issuance of the COVID-19 stay-at-home orders, Smith has continued to solicit investors by telephone and through meetings in his office or in investors' homes, the complaint states.
