The Securities and Exchange Commission has charged a former Axa Advisors broker in Lewistown, Pa., with running a 14-year Ponzi scheme that misappropriated $1.5 million from his customers.
Between 1998 and 2012, Dennis Wright, 68, allegedly induced at least 28 customers to withdraw funds from Axa variable annuity accounts, telling them he would transfer the funds to an Axa managed account of mutual funds with higher returns than the annuities. Instead, the funds were deposited into a bank account he controlled and used to pay personal expenses and other customers whom he owed money.
“In fact, the alleged Axa managed account was a function created by Wright to lure customers into transferring funds in a manner that would allow [Mr.] Wright to steal their savings,” according to the complaint. “Wright never invested his customers' money as promised.”
Reached by phone, Mr. Wright declined to comment. His attorney, Stephen Snook, did not return a call seeking comment.
The SEC charged that the scheme, which Mr. Wright hid with falsified Axa account statements, targeted childhood friends, members of his community and unsophisticated investors.
Mr. Wright was at Axa Advisors, a subsidiary of Axa Equitable Financial Services, from 1983 until 2012. The firm, which has around 5,000 brokers, according to InvestmentNews'
broker-dealer database, terminated his employment after it became aware of the alleged fraud, the SEC said.
The firm was not named as a defendant in this case and repaid the customers the money that was misappropriated, the SEC said.
An Axa spokeswoman, Jennifer Recine, wrote in an e-mailed statement that the firm was “pleased to put this matter behind us.”
"Axa Advisors immediately terminated Mr. Wright's registration upon uncovering evidence of his fraudulent activity and cooperated fully with the authorities throughout their investigation,” the statement said. “This was an isolated incident involving one representative.”
The Financial Industry Regulatory Authority Inc.
barred Mr. Wright from the industry in June 2013.
