Richard Crabtree Barred by SEC

Richard Crabtree (CRD #: 1855649), a broker formerly registered with Merrill Lynch, Pierce, Fenner & Smith, has been barred by the SEC, according to his BrokerCheck record, accessed on November 11, 2022. If you want to learn more about his conduct as a broker, keep reading.

Bar by SEC

On September 23, 2022, the Securities and Exchange Commission entered cease-and-desist proceedings against Richard Crabtree. The SEC allegedly found that Richard Crabtree defrauded an advisory client about the investments in the client’s accounts, the performance of these investments, and the value of the client’s assets.

The SEC alleged that Richard Crabtree deceived his client into believing that he had invested $250,000 of the client’s funds into a private investment partnership held outside of the investment adviser firm.

Richard Crabtree allegedly falsely represented to the client that the trading strategy was highly profitable and that the client’s interest had grown to approximately $10 million. However, the SEC alleged that Richard Crabtree had not invested any of the client’s funds into the investment partnership and that none of these purported profits were real.

Further, the SEC alleged that Richard Crabtree falsified records, including portfolio review reports, trading records, information in the investment adviser firm’s system, and mortgage payout letters. Richard Crabtree allegedly also liquidated securities in one of the client’s accounts.

The SEC concluded that Richard Crabtree allegedly willfully violated the following regulations:

• Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933
• Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
• Sections 206(1) and 206(2) of the Investment Advisers Act of 1940

Securities Act of 1933

Section 17(a)(1) and (a)(3) of the Securities Act of 1933 ban the use of deceptive schemes, devices, or other fraudulent practices in the securities business.

Securities Exchange Act of 1934

Section 10(b) of the Securities Exchange Act of 1934 prohibits deceptive, manipulative, and otherwise fraudulent activities in relation to the purchase or sale of securities. Rule 10b-5 specifically prohibits false statements and omissions of fact that mislead investors, as well as other fraudulent practices.

Investment Advisers Act of 1940

Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 forbid the use of fraudulent and deceptive schemes or practices.

Sanctions

The SEC ordered Richard Crabtree to cease and desist and fined him $40,000.

Termination from Merrill Lynch, Pierce, Fenner & Smith

On September 22, 2022, Richard Crabtree was fired from Merrill Lynch, Pierce, Fenner & Smith for allegedly making misrepresentations, providing false documentation to a client about a fictitious investment, entering inaccurate information into firm systems, and other misconduct.

FINRA Rule 2020

FINRA Rule 2020 bans the use of manipulative or deceptive tactics, including the misrepresentation or omission of material facts, as they relate to the purchase and sale of securities.

Investor Dispute

On September 24, 2020, an investor alleged that Richard Crabtree made misrepresentations from Fall 2016 to August 2020. The client sought $5 million in damages and received a settlement of $1.25 million.

Background Information

Richard Crabtree has passed the following exams:

• Series 65 – Uniform Investment Adviser Law Examination
• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 31 – Futures Managed Funds Examination
• Series 7 – General Securities Representative Examination
• Series 8 – General Securities Sales Supervisor Examination (Options Module & General Module)

He previously worked for Merrill Lynch, Pierce, Fenner & Smith (CRD#:7691).

Kurta Law Can Help

If you worked with Richard Crabtree and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf. 

p