[ by Howard Haykin ]

The SEC on Thursday charged an Atlanta-based unlicensed financial advisor with defrauding 2 elderly women he convinced to invest with him directly.  He has a history of steering retirees into fraudulent investment schemes.

Profiles of Defendants and Related Parties. James Quay and brother Jeffrey Quay are allegedly involved in the scheme. James, 50, a resident of Atlanta, was an RR with certain broker-dealers and investment adivsers - including Raymond James Fincl Svces and Securities America, Inc.  That ended with his conviction on 4/26/05 of filing a false income tax return - he was disbarred as an attorney by Georgia and Texas in 2007 and 2008, respectively.  Brother Jeffrey, 44, also of Atlanta.  Nothing more said.  However, for a little over one year, Jeffrey was associated as an RR with Resource Horizons Group and Questar Capital, both based in Georgia.

Relief Defendants.   James' wife, Julie Quay, served as CEO And CFO of  Georgia Consulting Group.  In 2008 and 2009, the  company received payments of investor funds totaling nearly $100,000.  JFQ Holdings, a Georgia Llc established by Julie and James, in 2009 and 2010, received a total of $55,000 of investor funds that had been submitted for participation in a covered-call equities trading program operated by Kenneth Burnt and Perimeter Wealth Financial Services.  The funds represented a finders fee for investors Burnt had recruited.

SEC Findings and Allegations.   Brothers James and Jeffrey allegedly facilitated a scheme in which the women invested $560,000 with the understanding that they were investing in a covered-call equities trading program. The Quays created a sham limited partnership called Trinity Charitable Solutions (TCS) to purportedly operate the program. However, TCS never became a legal entity, and instead the Quays merely deposited the investors’ money in a Scottrade account and personally misused at least $180,000 to afford mortgage payments, lavish restaurant meals, and membership at a massage spa.

Quay allegedly concealed from these 2 women and other investors that he is a convicted felon and disbarred attorney.  Previously, Quay steered investors toward fraudulent investment opportunities from which he received $1.4 million in illicit sales commissions.

e.g. -  Quay was an active sales agent and recruiter for a multi-million dollar Ponzi scheme run by a Georgia attorney and a scheme involving an unregistered covered-call equities trading program.  He has used various aliases and fake names including Jim Quay, Stephen Quay, and Stephen Jameson.

It's alleged that Quay would often host free dinner seminars that target retirees in order to gain their trust. Quay would then encourage the attendees to schedule private consultations with him to discuss their financial situation in greater detail. Attendees would receive a biography that detailed Quay’s educational background and professional designations. The follow-up consultations would often take place at Quay’s personal office, where his legal diplomas, bar certification, and other professional licenses and certifications were displayed on the wall. While he would regularly tout his academic background and legal expertise, he typically would not disclose to investors his criminal background, disbarment, and loss of professional designations and licenses.

SEC Sanctions. Quay settled the SEC charges by agreeing to pay over $2,030,000 in disgorgement, prejudgment interest, and a penalty.  Quay agreed to be permanently barred from the securities industry. 

The SEC’s litigation against Jeffrey Quay remains pending.
 

The case is:   SEC v. James S. Quay and Jeffrey A. Quay, Case No. 1:12-cv-03429-RWS (N.D. Ga., filed 10/2/12).
 

For further details, go to:  [Litigation Release 22506, 10/14/12] and [SEC Complaint].