Litigation Release No. 24414 / March 1, 2019
Securities and Exchange Commission v. John Gregory Schmidt, No. 3:18-cv-00320-WHR (S.D. Ohio)
On February 19, 2019, an Ohio federal court entered a consent judgment against John Gregory Schmidt, formerly a Dayton, Ohio registered representative of a nationwide broker-dealer and investment adviser.
The SEC’s complaint, filed September 25, 2018, alleged that Schmidt sold securities belonging to at least seven of his retail brokerage customers and secretly transferred over $1 million in proceeds to at least ten other customers to cover shortfalls in the customers’ accounts. According to the complaint, most of the injured customers were elderly with little to no financial expertise and were particularly vulnerable. For further information, see Litigation Release No. 24277 (September 25, 2018).
Without admitting or denying the allegations in the SEC’s complaint, Schmidt consented to the entry of a final judgment that enjoins Schmidt from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and orders Schmidt to pay disgorgement of $235,614, prejudgment interest of $35,049, and a civil monetary penalty of $864,301.