Sean Donald Premock, a former stockbroker and investment advisor at Kovack Securities, was sentenced to 10 years in prison for scamming his clients out of more than $1 million, according to an announcement by the Department of Justice for the Eastern District of Pennsylvania.
In addition to his sentence, Premock will have three years of supervised release. He was also ordered to pay $797,021 in proceeds and more than $1 million in restitution.
The judgment comes eight years after FINRA permanently barred Premock and one year after the Securities and Exchange Commission also barred him.
The 47-year-old started defrauding his clients in 2009. By 2010, Kovach Securities let him go for selling unapproved products, and clients started filing complaints against Premock because he had sold them unsuitable products. The advisor was eventually stripped of his licenses.
According to the DOJ, he continued to present himself as a broker and investment advisor and even set up his own investing companies, aptly-named Mocktrading Investments LLC and Mock Trading Group, to continue his criminal acts. Many of his victims were elderly, inexperienced investors or his family members.
He promised his clients he would place their funds in low-risk investments but invested only half the funds in unsuccessful securities. Premock spent the rest on himself and virtually lost all of his clients’ savings.
To cover up his crimes, Premock mailed false account statements and at one point called himself “Ethan” to keep his true identity concealed.
“Honesty, integrity, and trust all play a critical role in the relationship between a financial advisor and a client. Any advisor who deliberately betrays his clients’ trust for his own financial gain turns the system on its head,” said U.S. Attorney William McSwain. “The damage done by such corrupt financial advisors can be catastrophic; here, some of Sean Premock’s victims lost their life savings. Today’s sentence reflects the gravity of that betrayal.”