SEC Press press_release 6 KB 2,987 chars

Connecticut Department of Banking and SEC Announce Enforcement Actions Against David M. Faubert

Release: 2005-47

summary

David M. Faubert, a Connecticut-based registered representative, defrauded approximately 15 investors of over $4 million by fabricating an 8% fixed-return investment scheme and falsifying account statements, leading to his license suspension, revocation proceedings, and an SEC asset freeze in March 2005.

paragraph

David M. Faubert, a registered representative from Avon, Connecticut, allegedly defrauded about 15 investors of more than $4 million by convincing them to invest in a fake fixed-income opportunity promising 8% returns, with funds directed to his business, Faubert Financial Group, Inc. He concealed the fraud by tampering with monthly account statements and exploited personal relationships to gain trust. The Connecticut Department of Banking suspended and is seeking to revoke his license, while the SEC obtained a temporary restraining order and asset freeze against him in March 2005, in a coordinated federal-state enforcement action.

narrative

David M. Faubert, a registered securities representative based in Avon, Connecticut, defrauded approximately 15 investors of over $4 million by misleading them into investing in a fabricated fixed-income opportunity that promised an 8% annual return. Clients were persuaded to endorse checks payable to his business, Faubert Financial Group, Inc., under the false pretense of secure, high-yield investments. To conceal the fraud, Faubert falsified monthly account statements and leveraged personal friendships to build trust and evade suspicion. Following a complaint from an investor, the Connecticut Department of Banking conducted an on-site examination in early March 2005, uncovering the scheme and prompting immediate regulatory action. On March 24, 2005, the SEC secured a temporary restraining order and asset freeze against Faubert in federal court, while the state suspended his license and initiated proceedings for permanent revocation. Both the Connecticut Department of Banking and the SEC praised their collaborative investigation as a model of state-federal cooperation in protecting investors. Regulators emphasized that while most financial professionals operate ethically, cases like Faubert’s highlight the critical need for investors to independently verify opportunities and remain vigilant. The case underscored the devastating impact of betrayal of trust in financial advising and the importance of swift regulatory intervention.

Enriched metadata

Scheme: investment-adviser-fraud (100%)
Court: District of Connecticut
Victim loss: $4,000,000

Classified investment-adviser-fraud(confidence 100%). EDGAR detection: forms ADV/ADV-E/ADV-W/Form D· recall 33% / precision 13%. detection rule →

Extracted insights

Dollar amounts 1

$4.00M $4 million $1M–$10M

Entities 6

person david m. faubert
company faubert financial group, inc.
person monthly statements
person phony investments
agency Securities and Exchange Commission
company tower square securities, inc.

Triples 12

Connecticut Department Of Banking announced enforcement actions against David M. Faubert
SEC announced enforcement actions against David M. Faubert
Connecticut Department Of Banking issued order suspending license David M. Faubert
David M. Faubert held agent license with Tower Square Securities, Inc.
SEC obtained temporary restraining order and asset freeze against David M. Faubert
David M. Faubert defrauded approximately 15 Connecticut residents of upwards of $4 million
David M. Faubert misled clients into making phony investments
David M. Faubert tampered with monthly statements
David M. Faubert convinced clients to invest in account promising 8% return on fixed investment
Clients endorsed checks to Faubert Financial Group, Inc.
Connecticut Department Of Banking moving for formal revocation of license David M. Faubert
SEC sought temporary restraining order on March 23, 2005

View original SEC press releasesec.gov

Extracted body text (2,987c)

Connecticut Department of Banking and SEC Announce Enforcement Actions Against David M. Faubert FOR IMMEDIATE RELEASE 2005-47 Contact: Walter Ricciardi(617) 573-8934 Contact: Kathleen Doolan(860) 240-8176 Loss to investors exceeds $4 million The Connecticut Department of Banking and the Securities and Exchange Commission (SEC) announced today that they have taken actions against David M. Faubert, an Avon, Connecticut based registered representative. Banking Commissioner John P. Burke announced today that the Connecticut Department of Banking has issued an order suspending Faubert's license. Mr. Faubert had held an agent license with Tower Square Securities, Inc. The Department is also moving for a formal revocation of Mr. Faubert's license. The SEC has been working in conjunction with the Department of Banking's Securities Division to investigate this matter. The SEC announced that on March 23, 2005, it sought and, on March 24, 2005, it obtained a temporary restraining order and asset freeze against Mr. Faubert in the United States District Court for the District of Connecticut. This joint investigation between the state and the SEC is ongoing. "This was a fine example of state and federal cooperation in sharing resources in order to protect Connecticut investors," said Commissioner Burke. "I take pride in the efforts taken by my office and the SEC to investigate such perpetrators." According to the Department of Banking, in early March, following up on a complaint made by an investor, the Department of Banking's Securities Division conducted an on-site examination of Mr. Faubert's office. This investigation ultimately uncovered evidence that Mr. Faubert allegedly defrauded approximately 15 Connecticut residents of upwards of $4 million. He allegedly misled his clients - many he befriended - into making phony investments and then tampered with their monthly statements to cover up his crimes. Mr. Faubert convinced his clients to invest their money in an account that promised an 8% return on a fixed investment. Clients endorsed checks to Mr. Faubert's business, Faubert Financial Group, Inc. "The egregiousness of Mr. Faubert's conduct necessitated swift action by the SEC and the Connecticut Department of Banking," said Walter G. Ricciardi, the SEC's Boston District Administrator. "I am proud that we were able to achieve this result through the cooperative efforts of the SEC and Connecticut Department of Banking." "Mr. Faubert deceived many people who put their trust in him. While most broker-dealers and investment advisers are on the straight and narrow, fraudsters do exist and aim to steal the hard-earned money of investors," stated Commissioner Burke. "Take the time to thoroughly research an investment opportunity and be aware of exactly where your money is going. Be diligent and stay objective. There is no better guardian of your money than yourself." http://www.sec.gov/news/press/2005-47.htm Home | Previous Page Modified: 04/05/2005

OCR text (2,987c · plain-text · 99% conf)