The Securities and Exchange Commission (SEC) announced they settled charges against three men that defrauded investor in Colonial Tidewater Reality. The SEC also settled charges with Signator Investors for failure to supervise two of their employers involved in the alleged fraud.
According to the SEC, James Glover, a former representative of Signator Investors, was accused of orchestrating the fraud. The SEC complaint alleges Glover and Colonial Tide Water co-manager, Sherman Hill, provided false and misleading statements about Colonial Tidewater’s value and financial condition. Glover was also accused of lying to investors about the liquidity of their investment and potential returns. Furthermore, Glover and his business partner in Signator’s Maryland office, Cory D. Williams, failed to disclose a conflict of interest. The two did not inform investors that they received undisclosed commissions from Colonial Tidewater.
In a separate complaint, the SEC settled an administrative proceeding against Signator and Gregory J. Mitchell. The SEC complaint alleged that Signator and Mitchell, who supervised Signators’s Maryland office, failed to identify and prevent the purported fraud carried out by Glover and Williams. The SEC alleged Signator failed to have adequate policies and procedures governing consolidated reports. In addition, Mitchell was accused of routinely allowing Glover and Williams to select client files for his review which allowed them the opportunity to remove all reference of Colonial Tidewater investment before the files were reviewed.
In the settlement agreement, Colonial Tidewater, Glover and Hill consented to the appointment of a receiver to take control of Colonial Tidewater. Pending court approval, Colonial Tidewater will be required to pay $527,844 in disgorgement, $66,542 in prejudgment interest, and a $725,000 penalty.
Glover agreed to pay $839,128 in disgorgement, $64,977 in prejudgment interest, and a $450,000 penalty. He also agreed to be barred from the securities industry. Hill agreed to pay a penalty of $75,000. In a separate SEC order, Cory Williams also agreed to be be barred from the industry and to pay disgorgement, prejudgment interest, and penalty fees.
Signator agreed to pay a $450,000 penalty without admitting or denying the SEC’s findings. This was not the first time Signator has had to payout for their connection to Colonial Tidewarter. As previously reported, here, last year the Financial Industry Regulator Authority (FINRA) awarded nearly $1.6 million to three Signator clients that filed a FINRA arbitration claim against the firm and Glover. The White Law Group has also represented other investors in claims against Signator.
Brokerage firms have a responsibility to monitor their brokers and ensure that the investments recommended to clients are approved by the firm. When brokers like Glover and Williams conceal investment recommendations, the firm can be held liable for failure to supervise and responsible for investment losses.
If you suffered losses investing with James Robert Glover or Cory D. Williams, and would like to discuss your potential to recover your losses through a FINRA arbitration claim, please call the securities attorney of The White Law Group at (312) 238-9650 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to the representation of investors in FINRA arbitration claims against brokerage firms throughout the United States. Our offices are located in Chicago, Illinois and Vero Beach, Florida.
To learn more about The White Law Group, visit www.WhiteSecuritesLaw.com.