Financial Advisor Sentenced For Obstructing SEC Investigation

A Connecticut financial advisor was recently sentenced in federal court in Boston for obstructing a Securities and Exchange Commission (SEC) investigation by attempting to conceal secret and improper referral payments he made in order to secure the business of a wealthy client.

John William Rafal, the former president of a financial services company in Connecticut, was sentenced to one year of probation, with four months to be served in home detention and a fine of $4,000. Rafal has also entered into a separate agreement with the SEC, which bars him for life from working in the securities industry. As part of the agreement, Rafal must also pay nearly $600,000 to the SEC.

Rafal in 2011 struck a deal with an attorney in which Rafal’s company would pay the attorney a $50,000 referral fee in return for recommending that a wealthy client become a client of the company. After Rafal had already paid a portion of the fee, his company discovered the payments, stopped them and directed Rafal to have the attorney return the money that had already been paid. Unbeknownst to the company, however, Rafal then paid the referral fee to the attorney from his private checking accounts.

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Financial Advisor Sentenced For Obstructing SEC Investigation

by Banker & Tradesman time to read: 1 min