The U.S. Securities and Exchange Commission said Thursday it had charged the former director of compliance at a Long Island, N.Y., brokerage firm with taking part in a phony stock offering scheme that defrauded investors of hundreds of thousands of dollars.
According to the SEC, William Quigley, formerly with Trident Partners, schemed with his two brothers to dupe at least four “unsophisticated foreign investors” into buying shares in well-known companies or supposed start-ups that were on the verge of going public.
After the investors wired their funds to brokerage accounts Quigley had opened, the SEC said in a civil complaint, the momey was quickly transferred to an account in the Philippines, where his brothers lived. No securities were actually purchased, the complaint said.
Quigley was expected to be arraigned Thursday on related criminal wire fraud and money laundering charges brought by federal prosecutors. The SEC also alleges he stole commission checks from Trident.
“We allege a classic situation of the fox guarding the henhouse as William Quigley subverted his position of trust as compliance director and stole money from investors and his own firm,” Andrew M. Calamari, director of the SEC’s New York Regional Office, said in a news release.
Quigley served as compliance director at Trident from October 2007 to September 2014. According to the SEC, his brothers — Michael Quigley and Brian Quigley — were responsible for directly soliciting the investors and he began assisting them no later than 2006.
“Most importantly, he opened three brokerage accounts that he and his brothers used to misappropriate investor funds,” the SEC said.
Hundreds of thousands of dollars of investor funds were allegedly deposited in the accounts and, the SEC said, some of the money was “quickly withdrawn in small amounts (almost always in increments of $500) from ATM machines in the vicinity of William Quigley’s home and office.”
“Quigley and his co-conspirators allegedly engaged in a coordinated and sophisticated scheme built on lies and deceit to defraud overseas investors,” Kelly T. Currie, Acting U.S. Attorney for the Eastern District of New York, said in a news release.
If convicted in the criminal case, Quigley faces a maximum sentence of 20 years in prison.