Thomas, a former stockbroker affiliated with Morgan Stanley, was charged by the Securities and Exchange Commission (“SEC”) with fraudulently raising millions of dollars from scores of investors in the United States and Canada. To convince her victims to entrust her with their savings, Thomas misrepresented the safety and potential returns of their investments, charged the SEC.
Thomas told her victims that their money would be invested in a variety of safe products, from a high-yield investment program to U.S. Treasury securities, according to the SEC. In reality, she either did not invest her customers’ money as promised, or immediately took margin loans against their investments and used the money for her own purposes, according to the Commission. Thomas never disclosed the loans to her victims, the SEC charged.
The investors’ money was used in part to make payments to earlier investors, in Ponzi scheme fashion, said the regulators. Thomas also used her customers’ funds to finance her lifestyle, support her relatives, and even make a supposed “donation” to her church, according to the Commission’s Complaint. The donation, along with her credentials, convinced the church that she was a reputable and successful investment professional, said the regulators. The church subsequently invested close to $1 million in Thomas’ scheme, according to court records.
This is not the first time Thomas is accused of investment-related misconduct. She has a history of customer complaints and lawsuits arising out of alleged investment-related misconduct. In an earlier lawsuit filed in Dallas court, she has been accused by eleven investors of putting their funds in an investment fund that was unsuitable and neglecting to oversee their investments.