On February 28, 2022, the U.S. District Court for the Southern District of Ohio entered a final judgment against Scott Allen Fries, a former Ohio-based registered representative and investment adviser representative at a large, SEC-registered broker-dealer and investment adviser, for defrauding at least ten investors out of at least $458,000.

According to the SEC's amended complaint, between March 2014 and March 2019, Fries raised at least $458,000 from at least ten investors, including some of his brokerage customers, and spent that money on personal expenses. The amended complaint further alleged that, in order to hide his fraudulent activities, Fries lied to investors about the status of their investments, created and distributed false account statements purporting to show profitable investments, paid off an investor couple who had discovered that their account statement was fake, and subsequently lied to his employer about receiving investment funds from his brokerage customers.

The judgment, entered on the basis of default, enjoined Fries from violating the antifraud provisions of 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 Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Fries is ordered to pay disgorgement of $428,334.53 plus prejudgment interest of $110,548.02 and a civil penalty of $208,500.

The SEC's litigation was led by Robert M. Moye, with assistance from the investigative staff who conducted the underlying investigation, Jedediah B. Forkner and Keith Constance, and Anne C. McKinley, who supervised the investigation.

Add link to prior Litigation Release: https://www.sec.gov/litigation/litreleases/2020/lr24902.htm.