Investment Advisory Firm Charged With Fraud
PENDLETON - The U.S. Securities and Exchange Commission has charged Pendleton-based Steele Financial Inc. and its owner, Tamara Steele, with defrauding investors. The SEC says the firm sold approximately $13 million worth of high-risk securities to clients without disclosing it would receive up to 18 percent in commissions from the sales.
The complaint, filed in federal court, alleges the firm and Tamara Steele sold more than $15 million of the securities of Behavorial Recognition Systems Inc., which had previously been charged with fraud by the SEC, to clients between December 2012 and October 2016. As a result, the defendants received commissions worth more than $2.5 million.
Steele and the firm allegedly targeted more than 120 of their own clients, many of whom are current or former teachers and typically did not invest in individual stocks, and sold about $13 million in BRS securities without informing them of the commissions. Additionally, the defendants are accused of creating false invoices and taking other steps to conceal their activities with the BRS securities.
"We allege that Steele took advantage of her own advisory clients, including clients whom she herself described as 'two-pension, two Social Security families,'" said Antonia Chion, associate director of the SEC’s Division of Enforcement. "Investment advisers must put their clients’ interests ahead of their own and make full and fair disclosure of financial conflicts of interest."
The defendants are being charged with violating the antifraud and broker-dealer registration provisions of federal securities laws. The SEC is seeking disgorgement of the illegally-obtained money plus interest, along with penalties and permanent injunctions.