June 3 (Reuters) - A former stockbroker stole nearly $3 million from clients of an investment advisory firm he set up after being run out of the securities industry for lying to customers, the U.S. Securities and Exchange Commission said on Tuesday.
The SEC said it had obtained a preliminary injunction to halt the ongoing fraud by Scott Valente and his one-man firm, Albany, New York-based ELIV Group LLC, which raised more than $8.8 million from about 80 clients.
Valente declined to comment.
Valente, 56, stole at least $2.7 million from clients to support his “lavish lifestyle,” including his mortgage payments, jewelry, and a vacation condominium, the SEC said in a complaint filed in federal court in New York.
He carried out the alleged fraud by telling clients their investments had “achieved consistent and outsized, positive returns,” the complaint said.
It said Valente had assured prospective clients that their principal investment was “guaranteed,” liquid and backed by a large money market fund, while investment reports to existing clients cited “phony and inflated monthly returns.”
ELIV has racked up a total of $1.2 million in losses since the firm opened in 2010, the SEC said.
Wall Street’s industry-funded watchdog, the Financial Industry Regulatory Authority (FINRA), stripped Valente of his stockbroker’s license in 2009, permanently barring him from the securities industry.
The move came after Valente provided false account information to customers, among other offenses, FINRA said in a public regulatory filing at the time.
Valente’s FINRA record reflects more than 20 complaints during his 20 years as a stockbroker. Customers filed most of those complaints between 2004 and 2009, including allegations that Valente made trades without their permission. (Reporting by Suzanne Barlyn; editing by Linda Stern and Tom Brown)