The Securities and Exchange Commission (SEC) has charged Justin Murphy, a former resident of Greenwich, Connecticut, and his investment management firm Mara Investments, LLC, for fraudulent misappropriation of approximately $3.4 million of investor assets.
According to the SEC’s complaint, Justin Murphy induced multiple individuals to invest approximately $6.6 million in a private investment fund, Mara Investment Management LP controlled by Mara Investments.
Murphy told prospective investors that he was trading conservative stocks in the Fund’s brokerage accounts, and generating consistent profits. The complaint alleges that contrary to his representations, Murphy ultimately used almost all of the investors’ money for unauthorized business and personal expenses and to fund a company owned by a relative.
The complaint further alleges that when the depleted assets in the Fund’s brokerage account failed to generate consistent profits, Murphy concealed and furthered the fraud by providing his investors with falsified account statements and inaccurate tax documents that showed profitable trading.
The SEC’s complaint, which was filed in the U.S. District Court for the District of Connecticut, charges Murphy and Mara Investments with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rules 206(4)-8 thereunder.
The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against Murphy and Mara Investments.
