An analysis of the SEC Enforcement Division’s workload over the last several years clearly reflects and increasing focus on investment advisers. The trend traces back beyond the current Commission and ties to the development of a close working relationship between Enforcement and OICI cultivated over years. For all the cases brought, however, seldom has there been one where the amount of the investor money misappropriated was “all of it.” Yet that is precisely the amount the spouse of one victim testified was stolen by an investment adviser to professional athletes. U.S. v. Fulford, No. 4:16-cr-00551 (S.D. Tx.).
Peggy Ann Fulford was an investment adviser to sports stars from the NBA and NFL. She became the adviser to NBA Players Travis Best and Dennis Rodman. Other clients included NFL players Ricky Williams and Lex Hilliard. Ms. Fulford garnered these clients by representing that she had graduated from Harvard Law School and Harvard Business School. Ms. Fulford also claimed to have made millions on Wall Street buying and selling hospitals and real estate. She did not charge clients a fee – she claimed not to need it. Rather, her concern was that client earnings were properly handled; their investments properly made.
To achieve her goal Mr. Fulford requested and apparently received access to client bank accounts. She offered to manage client expenses and invest their funds for retirement. While that may have been the stated plan, it never happened. Rather, the funds were misappropriated.
Ms. Fulford pleaded guilty to one count of interstate transportation of stolen property. At her sentencing Kristin Williams, the former wife of Heisman trophy winner Ricky Williams testified along with Rebekah Hilliard, wife of former NFL player Lex Hilliard. The testimony detailed how Ms. Fulford’s theft devastated the victims and their families financially. When the Court as Ms. Williams how much of Ricky Williams’ NFL money Ms. Fulford took, she replied “All of it.”
During the sentencing hearing a New Orleans man testified that he knew Ms. Fulford as Peggy Jones. Ms. Jones convinced him to invest $25,000 in a medical company in Arizona. The company was bogus. At the time Ms. Fulford/Jones was out of jail on bail.
The Court imposed the maximum sentence on Ms. Fulford: 120 months in prison followed by three years of supervised release. In addition, she was ordered to pay $5,794,870 in restitution to the victims.
Save the date: On December 5, 2018 the Dorsey Federal Enforcement Forum will present six presentations detailing critical trends regarding SEC enforcement followed by a Holiday Party at Dorsey & Whitney, LLC, 1401 New York Avenue, Washington, D.C. 20005. The program is live in Washington and, in addition, live streamed and webcast.