The SEC has filed a civil suit against Trade-LLC, a Palm Beach Gardens investment advisor, and its managing members, Philip Milton (also of Palm Beach Gardens) and William Center. Trade-LLC is alleged to have told investors its trading software could double the investors’ money in a year. In reality, the SEC says the company was nothing more than a Ponzi scheme creating phantom profits.
Three investment clubs (Cash Flow Financial, LLC; New Life Club, LLC; and DC Advisors, LLC) collected more than $27.7 million for Trade-LLC. The scam reached approximately 800 members from as far north as Michigan and Ohio. An investigator at the Florida Office of Financial Regulation stated many of the investors were retirees looking to protect their savings. Financial reports prepared by Trade-LLC supposedly showed a return on investment of 8% a month, totaling 100% over the course of the year. To the contrary, Trade-LLC actually lost $2 million through trading, inflated salaries to its managing members, business costs and other expenses.
As a result, Trade-LLC, along with three other companies Milton and Center transferred Trade-LLC’s funds to, agreed to asset freezes and all assets will be placed in receivership. Milton agreed to return $2.35 million, pay a $130,000 penalty, and agreed to an order to stop breaking federal securities laws.