Paul Smith — Investment Advisory Fraud

Paul W. Smith, an Ex-broker, Allegedly Operated a Decades Long Investment Advisory Fraud Raising Approximately $2.35 Million from Roughly 30 Investors; Smith Allegedly Claimed He would Invest in Securities but then Purportedly Used the Money for Personal Use or to Repay other Investors

Ex-broker Paul Smith, from 1991 to 2016, allegedly raised approximately $2.35 million from about 30 investors as part of a decades long investment advisory fraud, according to an SEC Complaint filed in federal court in Philadelphia under review by attorneys Alan Rosca and James Booker.

Peiffer Rosca Wolf securities practice lawyers are investigating Paul Smith’s alleged investment advisory fraud scheme.

Investors who believe they may have lost money in activity related to Paul Smith’s alleged investment advisory fraud scheme are encouraged to contact attorneys Alan Rosca or James Booker with any useful information or for a free, no obligation discussion about their options.

Paul Smith allegedly made claims to investors that he would put their money into publicly traded securities via The Haverford Group, an outside partnership that he purportedly made and did not disclose to his broker-dealer employers, the Complaint states.

What is more, Smith allegedly executed very few securities investments and instead predominately used investor cash for his own personal use and to repay other investors, the Complaint notes.

Smith started his securities career in 1982 at Prudential-Bache Securities and worked at five firms before joining Bolton, where he reportedly worked from 2007 to 2017, according to his FINRA BrokerCheck Report. Furthermore, Smith worked at Philadelphia Brokerage Corp. from 2002 to 2007, Tucker Anthony from 2000 to 2002, and at Janney Montgomery Scott from 1990 to 2000, FINRA notes.

Smith, age 63, is resident of Wayne,Pennsylvania, and since 1991, he has allegedly acted as Haverford’s investment adviser, but, in contravention of Broker-Dealer-1 ‘s policies and procedures, Smith allegedly did not inform Broker-Dealer-I about Haverford, or his role as its adviser, the Complaint notes.

Smith allegedly created “The Haverford Group Subscription Agreement & Disclosure Document” which he purportedly advertised as being ”formed to make investments” and “provide [investors] with a high level of current income and capital appreciation as is consistent with the preservation ofcapital and the maintenance of liquidity,” the Complaint notes.

Smith Allegedly Convinced Trusting and Vulnerable Customers to Invest Money in Haverford, Including Many Elderly and Retired Persons; Smithe Barred in June by FINRA in Alleged Connection with Activities Charged in the SEC Case

Paul Smith was barred in June by FINRA in connection with the aforementioned alleged activities charged in the SEC case, according to the aforementioned Complaint being reviewed by attorneys Alan Rosca and James Booker.

Smith purportedly convinced some of his most trusting and vulnerable brokerage customers, many of whom were retired or elderly, to invest their money in Haverford while Smith allegedly knew that the investment was not legitimate, that he would purportedly not use all of their money to purchase securities on their behalf as promised, and purportedly would instead would use most of their money to repay other investors and for his own personal use, according to the SEC Complaint.

Furthermore, the SEC further alleges that Smith allegedly worked hard to hide his scheme and purportedly fabricated phony account statements that showed fictitious account balances and gains, the Complaint states.

Smith also allegedly kept his and Haverford’s activities and accounts hidden from his employers, and used funds from investors to repay others in order to quell suspicion, the Complaint states.

Matters in the case came to a head when Smith’s alleged scheme purportedly collapsed in October 2016 when an investor Smith allegedly failed to repay complained to the police, the Complaint notes.

What is more, Smith allegedly has 11 customer disputes listed on his broker report, according to his FINRA BrokerCheck Report.

Smith, by “knowingly or recklessly” engaging in the alleged conduct described in the SEC Complaint, allegedly violated Sections of the Securities Act, the Complaint states.

The SEC is seeking to enjoin Smith from engaging in the transactions, acts, practices, and courses of business alleged in the Complaint, disgorgement of allegedly ill-gotten gains from the purported unlawful conduct mentioned in the Complaint, together with prejudgment interest, and other relief as the Court may deem appropriate, the Complaint reports.

Securities Lawyers Investigating

The Peiffer Rosca Wolf securities lawyers often represent investors who lose money as a result of investment-related fraud or misconduct and are currently investigating Paul Smith’s alleged investment advisory fraud scheme. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of Paul Smith’s alleged investment advisory fraud scheme may contact the securities lawyers at Peiffer Rosca Wolf, Alan Rosca or James Booker, for a free no-obligation evaluation of their recovery options, at 888-998-0520 or via e-mail at arosca@prwlegal.com or jbooker@prwlegal.com.

Alan Rosca (1247 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.