Investment Adviser Fleeces Clients of Million
One of the most difficult things for investors may be to determine who to trust when considering investment advice. To be sure, there is no end of seemingly knowledgeable people prepared to offer investment advice, often based on their so-called years of trading and experience in the markets and working day after day with investors to select what may become profitable investments.
Most investors have worked long and hard to earn the funds they want to invest. Many have heard the great success stories of those who select one or more stocks to purchase which then skyrocket to success; and just as many can share stories and tales about those who put their funds in a seemingly wonderful looking stock only to watch it tank. The point is, there is no magic formula except the same one that typically spawned the funds to invest – hard work and careful examination of what may seem to be an overly complex process of investing — there is no short-cut as the Commission’s latest case in this area demonstrates. SEC v. Stock Purse Trading LLC, Civil Action No. 25-81026 (S.D.Fla. Filed August 20, 2025).
Named as defendants in the action are Stock Purse Trading, Liston Associates and Carole A. Liston, a resident of New York. Ms. Liston is also the owner of Stock Purse Trading and Liston Associates. Over a four-year period, beginning in August 2020, Defendants raised about $5.7 million from over 200 investors.
Investors entrusted their funds to Ms. Liston and her entities, relying on her expertise in trading and the seemingly complex investments of the stock market and stock trading business. The theory outlined by Ms. Liston seems obvious. The claim was that she would pool the investor capital and combine it with her expertise in trading and a proprietary formula for short selling to make more money for everyone. What could be better.
Perhaps reality. Ms. Liston only used a small portion of the investors funds to acquire stock and trade. She did use about $450,000 for herself (she misappropriated those funds) and took about $3.9 million of the investor funds to make “Ponzi-like” distributions to those who invested in Stock Purse Trading.
The Commission’s complaint alleges violations of Section 17(a) of the Securities Act, Section 10(b) and Rule 10b-5 under the Exchange Act and Sections 206(1) and 206(2) under the Advisers Act.
Ms. Liston and her firm resolved the action. Each consented to the entry of permanent injunctions based on the provisions cited in the complaint. The monetary remedies will be determined in the future. See Lit. Rel. No. 26379 (August 21, 2025).