Richard Crabtree: SEC Sanctions Merrill Advisor over Alleged Fraud

The Securities and Exchange Commission recently barred Annapolis financial advisor Richard Crabtree (CRD# 1855649) in connection with allegations he defrauded a client. Financial Industry Regulatory Authority records show that he was most recently registered with Merrill Lynch, though he has been barred from acting as a broker or investment adviser or otherwise associating with firms that sell securities or provide investment advice to the public.

The SEC issued an order sanctioning Mr. Crabtree in September 2022, according to a disclosure on his BrokerCheck report. The SEC found that he “defrauded his advisory client about the investments in the client’s accounts, their performance, and the value of the client’s assets.” Its findings state specifically that he allegedly “deceived deceived the client into believing that he had invested $250,000 of the client’s funds into a private investment partnership” outside the firm, and made false representations that the customer’s investments had grown to roughly $10 million through a “highly profitable” trading strategy. In reality, according to the SEC, Mr. Crabtree did not invest the client’s money into a private partnership “and none of its profits were real.” He allegedly endeavored to conceal his activities by creating falsified records, including “portfolio review reports, trading records, data in the investment adviser’s system, and mortgage payout letters, and liquidated securities in one of the client’s advisory accounts.” The SEC found that his conduct violated securities laws, issuing him an indefinite bar from participating in any penny stock offering and from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or NRSRO. He was also ordered to pay a fine of $40,000.

Mr. Crabtree’s BrokerCheck report discloses several customer complaints. The most recet, filed in March 2021, alleged that as a representative of Merrill Lynch, he made misrepresentations regarding an investment. In August 2022 the complaint reached a settlement of $1.25 million.

An earlier investor complaint, filed in 2012, alleged he provided inaccurate information regarding an investment while he was a Merrill Lynch representative. In 2015 the complaint reached a settlement of $27,856.58.

A third investor complaint, filed in 2004, alleged that he recommended unsuitable investment recommendations and misallocated the account. In 2006 the complaint reached a settlement of $75,000.

According to the Financial Industry Regulatory Authority, Richard Crabtree holds 34 years of securities industry experience. He became registered with Merrill Lynch in Annapolis, Maryland in 1988. His credentials include the passage of six securities industry examinations: the General Securities Sales Supervisor Examination (Options Module & General Module), or Series 8; the General Securities Representative Examination, or Series 7; the Futures Managed Funds Examination, or Series 31; the Securities Industry Essentials Examination, or SIE; the Uniform Securities Agent State Law Examination, or Series 63; and the Uniform Investment Adviser Law Examination, or Series 65. His SEC-ordered bar began on September 23, 2022. (Information current as of October 12, 2022.)

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