Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, March 4, 2010

SEC Charges Psychic with Securities Fraud

On March 4, 2010, the SEC filed a complaint charging Sean David Morton, whom the SEC describes as a nationally-recognized psychic who bills himself as “America’s Prophet” with a multi-million dollar offering fraud.  According to the SEC, beginning in the summer of 2006, Morton solicited individuals to invest in one of several companies he and his wife, Melissa Morton, controlled and claimed that he would use his psychic expertise to provide investment guidance to his investing team.  However, according to the complaint, Morton lied to investors about his past successes, and about key aspects of the Delphi Investment Group, including the use of investor funds and the liquidity of the funds, and that the profits in the accounts were audited and certified.  All together, Morton fraudulently raised more than $6 million from more than 100 investors for the Delphi Investment Group. 

According to the Commission’s complaint, Morton used his monthly newsletter, his website, his appearances on a nationally syndicated radio show called Coast to Coast AM, and appearances at public events, to promote his psychic abilities.  Morton made numerous materially false representations relating to his psychic abilities in order to solicit investors for the Delphi Investment Group.  For example, Morton wrote to potential investors in his July 20, 2006 newsletter that: “I have called ALL the highs and lows of the market, giving EXACT DATES for rises and crashes over the last 14 years.”  (emphasis in original.)  The Commission alleges that this assertion, like others Morton made in soliciting investors, is false.

The complaint seeks a final judgment permanently restraining and enjoining the Defendants from future violations of the above provisions of the federal securities laws.  The complaint further seeks a final judgment ordering the Defendants, jointly and severally, to disgorge their ill-gotten gains plus prejudgment interest, ordering the Relief Defendants to disgorge their ill-gotten gains plus prejudgment interest, and ordering the Defendants to pay civil penalties.  The complaint also seeks a final judgment ordering the Defendants and Relief Defendants to provide a verified accounting.

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If this is what the SEC is here to protect us from, I have lost all faith in our investors. Seriously? This guy was a joke.

Posted by: Jr Deputy Accountant | Mar 6, 2010 10:36:18 PM

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