The Securities and Exchange Commission (SEC) has filed charges against Christopher Aubin, a former Marine from Walpole, Massachusetts, accusing him of orchestrating a fraudulent scheme that allegedly defrauded 24 investors of over $2 million. Aubin and the companies he managed are charged with fraud and making false statements related to raising approximately $2.5 million by promising investors substantial returns through short-term, high-interest lending ventures.
However, according to the SEC, Aubin executed few legitimate loans and diverted most of the funds for personal expenses or to repay earlier investors in what the commission asserts bears many characteristics of a Ponzi scheme.
Misleading Marketing and False Promises
The SEC’s complaint reveals that Aubin marketed his financial services under the guise of legitimacy, despite lacking proper registration. Regulatory records confirm that he was never registered as a broker or investment advisor. His company, Anchor State Investments, advertised “Tailored Financial Planning From Accredited Professionals,” but the SEC alleges that this was part of the deception used to lure investors.
Aubin portrayed himself as a financial innovator offering high-interest, short-term lending opportunities as alternatives to traditional financing. Investors were promised returns ranging from 12% to 19% for loans lasting between one and eight months. These claims were instrumental in raising funds from individuals, including two of Aubin’s former Marine colleagues.
Misuse of Funds and Lifestyle Spending
Contrary to his promises, Aubin allegedly used investor funds to finance a lavish lifestyle. SEC investigators identified expenditures on luxury travel, upscale dining, and vehicles. One such purchase involved a BMW, which Aubin reportedly gave to his girlfriend, Ashley Corcoran. Corcoran, named as a relief defendant in the SEC’s complaint, is not accused of illegal activity but is alleged to possess assets obtained through the scheme.
The SEC asserts that Aubin used some funds to make partial, Ponzi-like payments to earlier investors, creating the illusion of legitimate returns. Despite these payouts, the complaint states that at least $2 million remains unreturned to investors, excluding the substantial returns Aubin initially guaranteed.
Red Flags for Wealth Advisors
This case underscores critical lessons for RIAs and wealth advisors when assessing alternative investment opportunities for clients. Aubin’s scheme exploited trust, leveraging personal connections and falsely projecting professionalism to lure unsuspecting investors.
For wealth advisors, it’s a reminder to:
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Verify Credentials: Always confirm an investment provider’s registration with regulatory bodies like the SEC or FINRA.
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Examine Promises: Be wary of high-return, low-risk claims, especially in alternative investment categories like private lending.
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Review Disclosures: Insist on reviewing detailed offering documents and financials before recommending opportunities to clients.
Legal and Financial Repercussions
The SEC is pursuing an injunction against Aubin and his entities, seeking to freeze assets, disgorge misappropriated funds, and impose civil penalties. These actions are intended to recoup losses for defrauded investors and deter similar schemes in the future.
For financial professionals, this case also emphasizes the importance of client education. Highlighting the risks associated with non-traditional investment avenues can protect clients from falling prey to deceptive practices like those alleged in this case.
