Interesting to see this sort of case reported as a Litigation Release on SEC.gov - rather than on FINRA.org. Yes, the SEC credits FINRA in the investigation, but this announcement makes me wonder whether we're seeing a new trend in regulatory investigations.

The SEC filed filed a civil action in U.S. District Court against former registered rep Patric Ken Baccam, accusing him of conducting fraudulent offerings and sales of securities. The commission also charged Baccam with acting as an unregistered broker by selling some of those securities away while associated with, and failing to disclose the sales to, Centaurus Financial, a dually-registered B/D and RIA.

From late 2010 through mid-2013, Baccam allegedly raised approximately $960,000 through the offer and sale of unsecured promissory notes to 18 brokerage customers and family members, representing that the notes would be used to fund a venture "flipping" real estate for a profit. However, Baccam knowingly or recklessly made multiple fraudulent statements regarding the safety of the investments, the promised returns on investment, the use of investor funds, and the nature and experience of the issuers.

Baccam is also charged with defrauding investors by, among other things, using newly-invested funds to make interest payments owed to earlier investors, to give investors the appearance that his real estate venture was profitable and induce further investment.

The SEC seeks permanent injunctive relief (including a conduct-based injunction), disgorgement plus prejudgment interest, and civil penalties against Baccam.