SEC charges Conn. man with fraud
WASHINGTON (Legal Newsline) - The Securities and Exchange Commission has announced that it has charged Stephen Blankenship of New Fairfield, Conn., and Blankenship's Deer Hill Financial Group with defrauding investors.
The SEC alleges that from at least 2002 through November, Blankenship embezzled at least $600,000 from at least 12 brokerage customers by falsely representing that he would invest their funds in securities through defendant Deer Hill. Blankenship was a registered representative of Vanderbilt Securities, a registered broker-dealer based in Melville, N.Y.
According to the complaint, Blankenship lied to his brokerage customers and lured them to withdraw money from their brokerage accounts by promising greater rates of return with DeerHill. Blankenship assured his customers that he would invest their money in established securities such as publicly traded mutual funds, the SEC said.
When customers requested account statements, Blankenship allegedly provided them with bogus Deer Hill statements. Blankenship never invested the customers' money, the SEC alleges. Instead, he allegedly used the money for personal expenses, business expenses and to make Ponzi-like payments to other customers who requested a return of all or part of their investment.
The U.S. Attorney's Office for the District of Connecticut has also charged Blankenship with criminal violations.