Financial Advisor Phillip Conley, of Jacksonville, FL., suspended by the Financial Industry Regulatory Authority (FINRA) in 2015, on account of his non-compliance through non-payment of an arbitration award against him, has now been sentenced to over 7 years in prison.
This sentence is not for the earlier infraction but a subsequent case of stealing millions from investors through bogus investment schemes. He had been indicted on one count of securities fraud and six counts of mail fraud in September 2020 and was staring at the possibility of over 20 years behind bars. The U.S. Attorney’s Office for the Northern District of West Virginia advised that he pleaded guilty to one count of securities fraud.
Despite the suspension, it appears that Conley continued to present himself as an investment advisor. According to the U.S, Attorney’s Office, he sought investments for non-existent or bogus ventures such as mineral rights, high-yield fixed-income securities, student housing construction, and others. Through his persuasive skills, he managed to con churches and pastors, and even family members and friends.
According to prosecutors, the money he got as investments was spent “on private jets, designer clothes, fine dining, jewelry, and housing and living expenses.”
In addition to the jail term of 87 months that was announced on the 3rd of December, Conley is also required to forfeit any property acquired out of the money from his crimes and pay a money judgment of $4.9 million.
The same conduct had led the Securities Exchange Commission (SEC) to file a civil action in April 2020 accusing Conley of stealing over $5.2 million from several investors including pastors and churchgoers, over multiple years.
Securities Fraud refers to a variety of illegal activities that deceive investors or manipulate financial markets. Insider trading, broker misrepresentation, and stock churning are the most common forms of Securities Fraud.
Federal Securities Fraud Definition
Securities Fraud, according to the Securities Exchange Act of 1934 and the Securities Act of 1933, is the willful engaging in deceptive practices to manipulate financial markets or induce financial investors to make financial investments decisions based upon deceptive or false information.
“Securities” can be broadly defined as any type of investment such as stocks, bonds or banknotes, commodities, options, or investment contracts.
Conspiracy to commit securities fraud
When two or more people conspire to commit securities fraud, it is when they manipulate financial markets or deceive investors into making financial decisions.
Importantly, minors involved in securities fraud schemes can be charged with conspiracy to commit securities fraud.
Because 18 U.S.C. 371, the government charges minor participants with Conspiracy To Commit Securities Fraud. SS 371 states that Conspiracy to Commit Securities Fraud carries the same penalties as actual Securities Fraud. This means that minor participants can cut deals to testify against the major participants to avoid the harsh penalties Securities Fraud carries.