The Securities and Exchange Commission yesterday announced fraud charges against a former director of compliance of a registered broker-dealer who was accused of defrauding investors and stealing money from the brokerage firm where he worked.
The SEC’s Enforcement Division alleges that William Quigley was involved in a scheme to solicit investors to buy stock in well-known companies or supposed start-ups on the verge of going public. In reality, Quigley and his co-conspirators were not registered brokers and did not invest the funds as promised.
Instead, after investors wired their funds to bank and brokerage accounts that Quigley set up and controlled, the money was quickly wired to a bank account in the Philippines, or withdrawn in small increments from ATM machines in the vicinity of Quigley’s home and office. “We allege a classic situation of the fox guarding the henhouse as William Quigley subverted his position of trust as compliance director and stole money from investors and his own firm,” said Andrew Calamari, Director of the SEC’s New York Regional Office.
The allegations state that Quigley opened three brokerage accounts to misappropriate investor funds, including a secret account at his then-employer Trident Partners. “It was Quigley’s job as compliance director to open and properly route all incoming mail, as well as to monitor all wires and report any suspicious transfers,” the SEC stated. “Quigley allegedly abused his position to keep Trident Partners from learning about the secret account and its corresponding wires, and he stole commission checks to Trident Partners and deposited them in outside accounts he used in the scheme.”
The matter will be scheduled for a public hearing before an administrative law judge for proceedings to adjudicate the Enforcement Division’s allegations and determine what, if any, remedial actions are appropriate.
The Enforcement Division charges Quigley with violating antifraud provisions of the federal securities laws, and with causing, and aiding and abetting violations of the antifraud provisions. Quigley also is charged with causing and aiding and abetting violations by Trident of federal securities law provisions that require broker-dealers to report transactions involving, among other things, funds derived from illegal activity.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York yesterday announced criminal charges against Quigley. If convicted, he faces up to 20 years in prison.