Investor Lawyers Blog
David L. Rothman, a Pennsylvania resident, has been charged by the Securities and Exchange Commission for allegedly defrauding elderly clients. Stock fraud lawyers say the civil and criminal charges accuse Rothman of sending his clients falsified account statements that inflated the value of their accounts. Then, in a repayment scheme, Rothman took funds from another client in order to repay those who received phony statements.
According to the SEC’s complaint, the two clients were “elderly and unsophisticated investors” which, securities arbitration lawyers say, made them ideal targets for Rothman’s fraud. The complaint further alleges that the fraud occurred from 2006-2011 and the falsified statements “materially overstated” the value of the clients’ investments. In addition, allegations against Rothman state that once the investors realized the fraud had taken place, the financial advisor stated that he would repay the statements’ reported value. However, his financial resources eventually ran short.
Apparently, Rothman was previously censured by the CFP Board in 2004. This separate matter involved the purchasing of mutual fund Class S shares.