Chicago investment adviser charged with fraud in alleged Ponzi scheme

June 8, 2026 - 21:18

Federal regulators have charged a Chicago-based investment adviser with fraud, accusing him of operating a Ponzi scheme that siphoned millions of dollars from clients. The Securities and Exchange Commission alleges that more than $3.6 million in client funds is missing from investments managed by Sterling Capital, a firm based in the city.

According to the SEC's complaint, the adviser promised steady returns through conservative investment strategies but instead used new investor money to pay off earlier clients, a classic hallmark of a Ponzi scheme. The agency claims that the adviser fabricated account statements and performance reports to hide the losses and misappropriation of funds. Investigators say the scheme unraveled when clients began requesting withdrawals that exceeded the available cash.

The SEC is seeking a court order to freeze the adviser's assets and appoint a receiver to recover any remaining funds for victims. The accused faces charges of securities fraud and violating fiduciary duties. No criminal charges have been announced yet, but the civil case could lead to significant financial penalties and a permanent ban from the investment industry. Authorities are urging any affected investors to come forward as the investigation continues.