For a guy who has been fired a couple times, fined, censured and slapped with a cease and desist order, Paul James Marshall was living the good life. The Marietta investment adviser lived in a million-dollar home, took luxury vacations and paid for his children to attend camps and private schools.
Or rather, his clients paid, to the tune of a couple million dollars, federal authorities say. The Securities and Exchange Commission last year accused him of misappropriating money that clients invested with his investment adviser firms, Bridge Securities/Bridge Financial and Bridge Equity, and diverting funds that were going into another company he controlled, FOGFuels. Some of those clients were elderly, according to SEC’s lawsuit.
“To conceal their fraud, Marshall and Defendants Bridge Securities and Bridge Equity have provided their clients with fraudulent account statements showing non-existing investments and illusory investment returns,” the lawsuit alleged.
Marshall didn’t respond to the suit. So last month, a federal judge ordered him and his companies to pay back the money, and the judge fined them a total of more than $13 million. Now, SEC is trying to get him banned from the investment industry.
That move has been a long time coming, according to SEC records. The 49-year-old has a record of complaints dating back 24 years.
In 1990, Marshall was accused of establishing accounts for 16 public customers and signing their names on account applications without their knowledge or consent, an allegation that later led to a $2,500 fine and censure by the National Association of Securities Dealers.
In 1991, Marshall was summarily dismissed from Paine Webber when he was accused of signing customer names to transfer money from cash accounts to money markets.
In 1997, Prudential Securities paid $45,000 to settle a customer complaint that Marshall churned accounts – making excessive and unauthorized trading in purchases of common stock in 1993 and 1994.
In 2001, when he worked at Robert W. Baird & Co., a client complained that he wasn’t getting a rate of return he believed he had been guaranteed on an annuity. The company paid $24,500 to settle the complaint, with Marshall reporting that he was surprised to hear a deal had been made and was not asked to contribute to the payment.
In 2006, when Marshall worked at Oppenheimer & Co., a client alleged he misrepresented some funds and changed orders without authorization, though the company reportedly found no wrongdoing.
In 2008, though, Oppenheimer discharged Marshall after learning that he had taken a loan from a client and engaged in a priate securities transaction without knowledge of th firm.
In 2010, the Financial Industry Regulatory Authority found he offered to buy shares of a company for a customer but didn’t do that and didn’t return the money, instead using it for his personal expenses.
In 2012, he was suspended for failure to comply with an arbitration award or settlement agreement.
In January 2013, when he was working for Oppenheimer & Co and American Wealth Management, he was accused of taking $25,000 from a customer to invest in a real estate entity and instead depositing the money into a bank account he controlled. He also was accused of providing false information to another customer. When FINRA investigated, Marshall wouldn’t produce documents.
Marshall could not be reached for comment.
BTW, Georgia finally took action against Marshall last year, after the SEC filed its lawsuit. Secretary of State Commissioner Brian Kemp, who also is the state securities commissioner, ordered that Marshall’s registration be revoked.