SEC charges Clear Path’s Patrick Churchville

On May 8, 2015 the SEC filed a complaint against ClearPath Wealth Management and its president and owner Patrick Churchville as defendants for operating a fraudulent scheme that the SEC alleges resulted in at least $11 million in losses to investors. The Multi-Strategy Funds and the HCR Value Fund, L.P. were named as relief defendants.

According to the SEC’s complaint, from at least December 2010, ClearPath and Patrick Churchville diverted deposits from new investors to pay prior investors, used proceeds from selling investments to pay unrelated investors, used investors’ funds as collateral for loans to make investments for their own benefit,converted investor funds into investments for ClearPath’s own benefit, and stole $2.5 million of investor funds to purchase Patrick Churchville’s waterfront home in Barrington, Rhode Island. The complaint alleges that Patrick Churchville and ClearPath used a variety of deceptive acts and misleading accounting tricks to conceal their fraud, and then prolonged the scheme by lying to investors about the status, worth, and disposition of those investments.

ClearPath, Patrick Churchville, and the Multi-Strategy Funds consented to the entry of an asset freeze and other preliminary relief. In addition to the asset freeze, the court prohibited ClearPath and Patrick Churchville from soliciting, accepting, or depositing any client funds, or from exercising any discretionary authority over clients’ accounts.

 

The above allegations contained in the SEC’s complaint have not been proven, and the issuance of a complaint represents the SEC’s initiation of a formal proceeding in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint.

 

Patrick Churchville registration and disciplinary history

In order to lawfully sell investments to the public, one must either be registered or exempt from registration. Patrick Churchville was registered with:

08/2009 – 02/2011
SPIRE SECURITIES, LLC (CRD# 144131) – PROVIDENCE, RI
04/2007 – 12/2007
MORGAN STANLEY & CO., INCORPORATED (CRD# 8209) – PROVIDENCE, RI
09/2004 – 04/2007
MORGAN STANLEY DW INC. (CRD# 7556) – PROVIDENCE, RI
03/2002 – 10/2004
WACHOVIA SECURITIES, LLC (CRD# 19616) – ST. LOUIS, MO
02/1997 – 04/2002
UBS PAINEWEBBER INC. (CRD# 8174) – WEEHAWKEN, NJ
09/1992 – 02/1997
OPPENHEIMER & CO., INC. (CRD# 630) – NEW YORK, NY

According to FINRA’s CRD disclosure report, Patrick Churchville has been the subject of one customer complaint.

The Law Office of David Liebrader practices exclusively in the field of investment loss recovery and our securities attorneys have successfully resolved over 1000 investment loss cases over the past 20 years. Recoveries for clients top $40 million. The types of claims we have successfully handled include those involving unsuitable investments (suitability claims), excessive trading or “churning”, misrepresentations and omissions, unauthorized trading, over-concentration of illiquid or overly risky investments, pump and dump scams involving “penny stocks”, direct participation programs (private placements) involving real estate investment trusts (REITS), oil and gas exploration programs, leasing equipment deals and receivable financing, promissory notes whether sold through a broker dealer or as part of the outside business activities of a registered representative, ponzi scheme losses, failure on the part of the broker dealer to perform due diligence, state securities law (blue sky) violations and failure to supervise.

Investment losses can be recovered through a process known as FINRA arbitration. FINRA regulates broker dealers that sell investments, and provides an arbitration forum to resolve investor disputes. Investors can pursue claims against their brokerage firms in the FINRA arbitration forum. Common claims in the forum are those for suitability, breach of fiduciary duty, misrepresentations and omissions, negligence, violation of FINRA rules, state and federal securities laws violations, elder abuse, breach of contract and failure to supervise. On average, the recovery process takes approximately a year, from start to finish.

FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).

If you have suffered investment losses please call The Law Office of David Liebrader at (702) 380-3131 for a free, confidential consultation