MORRISTOWN — The Attorney General’s office announced the state’s Bureau of Securities revoked the license of a Morristown investment adviser and assessed $750,000 in civil penalties for selling unregistered securities in seven different investments.
Gary Scheer of Retirement Financial Advisors, LLC, from 2010 to 2018 recommended and sold more than $12 million of unregistered securities to at least 50 investors, said the AG’s office. Six of the seven securities were deemed fraudulent by state and federal authorities, including investments tied in Ponzi schemes and other fraudulent investments, documents show. The sales generated more than $694,000 in commissions for Scheer.
“Investment advisers are expected to serve the interests of their customers with undivided loyalty, and not exploit them for financial gain,” said Attorney General Gurbir Grewal in a statement. “We will not allow unscrupulous professionals to undermine the integrity of New Jersey’s financial industry by enriching themselves at the financial expense of their customers,” the statement reads.
According to the summary penalty and revocation order, the Bureau found that Schreer continued to advise customers to purchase securities even after he learned other unregistered securities he recommended were under regulatory scrutiny. The state found Scheer “breached his fiduciary duty” and violated the law for “failing to conduct reasonable due diligence” and “misrepresented the risks” associated with the investments, the statement shows.
Scheer’s customers were steered into buying securities such as the “Woodbridge Securities,” which is related to a $1.2 billion Ponzi scheme, Grewal said. In addition, investors purchased “Northridge Securities,” which were involved in a “fix-and-flip” real estate investment whose principals were recently federally charged as running a $47 million Ponzi scheme, reads the statement.
The Bureau’s investigation was handled by Deputy Bureau Chief Amy Kopleton, and Investigator Delfin Rodriguez. Assistant Attorney General Brian F. McDonough, Deputy Attorney General and Section Chief Victoria Manning, and Deputy Attorney General Nicholas Dolinsky of the Securities Fraud Prosecution Section in the Division of Law represented the Bureau in this matter.
