IRVINE – The Securities and Exchange Commission has charged Brenda A. Eschbach with investment advisory fraud and securities fraud. The SEC accuses Eschbach with being involved in multi-year misappropriation of client funds. Eschbach, who hails from Tustin, California, has been acting as an unregistered broker, and has allegedly misappropriated $3 million in investment advisory client funds between the years 2003 and 2009, according to the Commission.
The Commission is looking for disgorgement of Eschbach’s gains and a civil money penalty.
Eschbach allegedly made misappropriated the funds by through an entity called Aventine Investment Services Inc., which is now defunct. She also began to misappropriate funds when she was running a franchise operation for a big investment adviser, charged the Commission. Eschbach allegedly ignored client instruction for investments and instead used the money they gave her for private expenses. The clients were issued false account statements instead. Their money went to fund Eschbach’s car lease payments, credit card payments and her daughter’s private school tuition fees, stated the Commission.
Eschbach has not denied the Commission’s allegations and has consented to the disgorgement of $2,561,873 in profits. She also agreed to be permanently enjoined from violating Section 17(a) of the Securities Act, Sections 206(1) and 206(2) of the Advisers Act and Sections 10(b) and 15(a) of the Exchange Act. She has also agreed to the Commission’s order preventing her from associating with any agent, broker or investment adviser.
On September 30th of last year, Eschbach also pleaded guilty to one count of money laundering and one count of mail fraud. She is awaiting sentencing.