Potomac, Maryland – The U.S. Commodity Futures Trading Commission (CFTC) has settled charges against Convergent Wealth Advisors LLC and the estate of David Zier for fraudulent solicitations related to ZAM LLC, an investment entity operated by Zier. The settlement requires Convergent to pay an $800,000 civil monetary penalty and prohibits future violations of the Commodity Exchange Act and CFTC Regulations.
The CFTC order details that from 2007 to 2014, Zier solicited investments in ZAM from clients of Convergent, while acting as an agent of the firm. He also utilized Convergent’s operational resources to facilitate transactions related to ZAM. As a result, the CFTC holds Convergent responsible for Zier’s actions.
The core of the fraud involved false representations regarding ZAM’s performance. Zier allegedly claimed ZAM was profitable despite substantial losses, and fabricated performance data provided to investors to conceal these losses. According to the order, fraudulent solicitations totaled $2,912,960 from December 23, 2010, until Zier’s death.
Convergent’s compliance personnel discovered inconsistencies in ZAM’s account statements and performance reports in 2014, which were being provided to Convergent clients invested in ZAM. The firm possessed the ability to monitor both ZAM’s financial accounts and Zier’s related email correspondence.
The CFTC investigation received assistance from the U.K. Financial Conduct Authority, the U.S. Securities and Exchange Commission, and the National Futures Association. The case was led by CFTC Division of Enforcement staff members Laura Brookover, Michelle Bougas, Jennifer Diamond, Alison Wilson, and Rick Glaser.
The CFTC encourages customers to report suspicious activity via its toll-free hotline at 866-FON-CFTC (866-366-2382) or through its online tip/complaint system.
Source: CFTC.gov
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