Press Release: SEC Announces Emergency Action to Halt Ongoing Fraud Against Senior Citizens; 2006-197; Nov. 30, 2006
Peter J. Dawson and his corporations, BMG Advisory Services and Ethan Thomas Co., defrauded at least seven elderly investors out of over $2 million by falsely promising 12–15% guaranteed returns and misappropriating funds for personal use, including over $100,000, leading the SEC to seek emergency asset freezes, disgorgement, and civil penalties.
The SEC charged Peter J. Dawson and his two corporations, BMG Advisory Services and Ethan Thomas Co., with defrauding at least seven senior citizens out of more than $2 million through false promises of 12–15% guaranteed returns and secure investment management. Dawson misled investors into surrendering annuities and mortgaging homes, then diverted over $100,000 for personal expenses while failing to make promised mortgage or return payments, even issuing fraudulent account statements as late as October 2006. The SEC filed an emergency complaint seeking temporary restraining orders, asset freezes, accountings, civil penalties, and disgorgement of ill-gotten gains, with its investigation still ongoing.
Peter J. Dawson, president and sole shareholder of BMG Advisory Services and Ethan Thomas Co., orchestrated a fraud targeting elderly investors on Long Island, convincing at least seven senior citizens to cash out variable annuities and mortgage their homes to transfer over $2 million to his firms. He falsely promised guaranteed annual returns of 12–15%, assured clients he would pay their mortgages, and claimed excess returns would be accrued in their accounts, even providing written assurances of 'certified balances' as recently as October 25, 2006. Instead of investing the funds, Dawson misappropriated over $100,000 for personal use and failed to make any mortgage payments, leading investors to discover delinquencies and attempt to contact him—only to find his office closed and his phone calls ignored. The SEC filed an emergency enforcement action in the Eastern District of New York, seeking temporary restraining orders, asset freezes, mandatory accountings, civil penalties, and disgorgement of all ill-gotten gains to prevent further harm. The Commission emphasized the particularly egregious nature of exploiting senior citizens, citing its July 2006 Seniors Summit as part of its broader commitment to protecting older Americans from investment fraud. The investigation remains active, with regulators continuing to trace the flow of misappropriated funds and identify additional victims. Dawson’s conduct exemplifies a pattern of trust abuse, false documentation, and deliberate evasion, prompting urgent regulatory intervention to halt ongoing financial harm.
Extracted insights
- $2.00M $2 million $1M–$10M
- $100K $100,000 $100K–$1M
- company bmg advisory services, inc. and ethan thomas co., inc.
- person mark k. schonfeld
- person peter j. dawson
- company peter j. dawson, bmg advisory services, inc., and ethan thomas co., inc.
- agency sec northeast regional office
- agency Securities and Exchange Commission
- SEC filed enforcement action against Peter J. Dawson, BMG Advisory Services, Inc., and Ethan Thomas Co., Inc.
- Peter J. Dawson obtained from investors over $2 million
- Peter J. Dawson is president and sole shareholder of BMG Advisory Services, Inc. and Ethan Thomas Co., Inc.
- Peter J. Dawson promised investors 12 to 15 percent guaranteed return
- Peter J. Dawson misappropriated over $100,000 of clients' funds
- Peter J. Dawson targeted elderly investors living on Long Island
- SEC seeks temporary restraining orders, asset freezes, and accountings
- Complaint filed in Eastern District of New York in Brooklyn
- Peter J. Dawson failed to make investors' mortgage payments
- Mark K. Schonfeld is Director of SEC Northeast Regional Office
- SEC held Seniors Summit in July 2006
- Defendants charged with fraudulent solicitations and misappropriating investor funds
SEC Announces Emergency Action to Halt Ongoing Fraud Against Senior Citizens SEC Seeks Temporary Restraining Orders, Asset Freezes and Accountings FOR IMMEDIATE RELEASE 2006-197 Washington, D.C., Nov. 30, 2006 - The Securities and Exchange Commission today filed an emergency enforcement action against Peter J. Dawson and two of his corporations to halt an ongoing fraud in which the defendants have obtained over $2 million from at least seven investors, most of them senior citizens. The Commission's complaint, filed in the Eastern District of New York in Brooklyn, charges the defendants, Peter J. Dawson, BMG Advisory Services, Inc., and Ethan Thomas Co., Inc., with making fraudulent solicitations and misappropriating investor funds. The Commission seeks temporary restraining orders freezing the defendants' assets, requiring them to provide accountings and prohibiting them from committing future violations of the federal securities laws. The Commission's complaint also seeks a final judgment assessing civil penalties and ordering the defendants to disgorge their ill-gotten gains. Mark K. Schonfeld, Director of the Commission's Northeast Regional Office, stated, "Taking advantage of elderly investors is particularly tragic. In this case we have moved quickly against the defendants to put a stop to this fraud and prevent further harm." The complaint alleges that the defendants obtained more than $2 million from at least seven investment advisory clients. Dawson, the president and sole shareholder of BMG and Ethan Thomas, targeted primarily elderly investors living on Long Island, and advised these clients to surrender existing variable annuity policies, mortgage their residences, and transfer the proceeds to Ethan Thomas for Dawson to manage through BMG, his investment advisory firm. In connection with Dawson's advisory services, Dawson made materially false and misleading statements to his clients about their investments and the use of their funds. Dawson promised between a 12 and 15 percent guaranteed return on each investment, and he assured clients that he would arrange to pay their mortgages and/or pay monthly "returns" on the investments. To the extent that the 12 to 15 percent return exceeded the client's mortgage obligation, Dawson promised that excess return would be accrued in the client's account. As recently as Oct. 25, 2006, Dawson, through BMG, assured investors in writing that their accounts contained a "certified balance" of the initial funds entrusted to him plus the guaranteed interest. Rather than investing the money as promised, Dawson abused his clients' trust and misappropriated, and is continuing to misappropriate, their funds for his own use within the last several months. Dawson withdrew over $100,000 of his clients' funds for his own benefit. At the same time, Dawson failed to make investors' mortgage payments as he had promised. During the past month, because some investors received notices that their mortgages were not being paid, they complained to Dawson, who has since refused to return their calls and closed BMG's office. The Commission's investigation into this matter is continuing. The Commission is committed to protecting older Americans from investment fraud. In July 2006, the SEC held its first-ever Seniors Summit, where the SEC joined with state regulators and others to examine how to best protect older Americans from investment fraud. A webcast of the July 17, 2006, event is available at http://www.sec.gov/news/otherwebcasts.shtml. Materials related to the Seniors Summit are located at: http://www.sec.gov/spotlight/seniors/seniors_summit.htm. # # # Contacts: Helene Glotzer, Associate Regional Director, 212-336-0078 Gerald Gross, Assistant Regional Director, 212-336-0085 Nancy Brown, Senior Trial Counsel, 212-336-1023 Northeast Regional Office U.S. Securities and Exchange Commission Additional materials: Litigation Release 19927; Complaint http://www.sec.gov/news/press/2006/2006-197.htm Home | Previous Page Modified: 11/30/2006
SEC Announces Emergency Action to Halt Ongoing Fraud Against Senior Citizens SEC Seeks Temporary Restraining Orders, Asset Freezes and Accountings FOR IMMEDIATE RELEASE 2006-197 Washington, D.C., Nov. 30, 2006 - The Securities and Exchange Commission today filed an emergency enforcement action against Peter J. Dawson and two of his corporations to halt an ongoing fraud in which the defendants have obtained over $2 million from at least seven investors, most of them senior citizens. The Commission's complaint, filed in the Eastern District of New York in Brooklyn, charges the defendants, Peter J. Dawson, BMG Advisory Services, Inc., and Ethan Thomas Co., Inc., with making fraudulent solicitations and misappropriating investor funds. The Commission seeks temporary restraining orders freezing the defendants' assets, requiring them to provide accountings and prohibiting them from committing future violations of the federal securities laws. The Commission's complaint also seeks a final judgment assessing civil penalties and ordering the defendants to disgorge their ill-gotten gains. Mark K. Schonfeld, Director of the Commission's Northeast Regional Office, stated, "Taking advantage of elderly investors is particularly tragic. In this case we have moved quickly against the defendants to put a stop to this fraud and prevent further harm." The complaint alleges that the defendants obtained more than $2 million from at least seven investment advisory clients. Dawson, the president and sole shareholder of BMG and Ethan Thomas, targeted primarily elderly investors living on Long Island, and advised these clients to surrender existing variable annuity policies, mortgage their residences, and transfer the proceeds to Ethan Thomas for Dawson to manage through BMG, his investment advisory firm. In connection with Dawson's advisory services, Dawson made materially false and misleading statements to his clients about their investments and the use of their funds. Dawson promised between a 12 and 15 percent guaranteed return on each investment, and he assured clients that he would arrange to pay their mortgages and/or pay monthly "returns" on the investments. To the extent that the 12 to 15 percent return exceeded the client's mortgage obligation, Dawson promised that excess return would be accrued in the client's account. As recently as Oct. 25, 2006, Dawson, through BMG, assured investors in writing that their accounts contained a "certified balance" of the initial funds entrusted to him plus the guaranteed interest. Rather than investing the money as promised, Dawson abused his clients' trust and misappropriated, and is continuing to misappropriate, their funds for his own use within the last several months. Dawson withdrew over $100,000 of his clients' funds for his own benefit. At the same time, Dawson failed to make investors' mortgage payments as he had promised. During the past month, because some investors received notices that their mortgages were not being paid, they complained to Dawson, who has since refused to return their calls and closed BMG's office. The Commission's investigation into this matter is continuing. The Commission is committed to protecting older Americans from investment fraud. In July 2006, the SEC held its first-ever Seniors Summit, where the SEC joined with state regulators and others to examine how to best protect older Americans from investment fraud. A webcast of the July 17, 2006, event is available at http://www.sec.gov/news/otherwebcasts.shtml. Materials related to the Seniors Summit are located at: http://www.sec.gov/spotlight/seniors/seniors_summit.htm. # # # Contacts: Helene Glotzer, Associate Regional Director, 212-336-0078 Gerald Gross, Assistant Regional Director, 212-336-0085 Nancy Brown, Senior Trial Counsel, 212-336-1023 Northeast Regional Office U.S. Securities and Exchange Commission Additional materials: Litigation Release 19927; Complaint http://www.sec.gov/news/press/2006/2006-197.htm Home | Previous Page Modified: 11/30/2006