The U.S. Securities and Exchange Commission has barred a Yonkers woman who defrauded investors of $5.7 million from holding herself out as an investment adviser.
Carole A. Liston, 61, was unlicensed when she solicited about 200 investors in a Ponzi scheme, according to SEC sanctions issued on March 3.
Liston misappropriated assets, the SEC administrative order states, and misrepresented her trading performance.
The administrative action is based on a lawsuit the SEC filed last year in U.S. District Court, West Palm Beach, Florida.
Liston was founder and president of Stock Purse Trading LLC and Liston Associates Inc., in Palm Beach Gardens, Florida. Neither firm was registered with the SEC.
From August 2020 to July 2024, when Liston lived in Coconut Creek, Florida, she solicited investors nationwide with promises of huge and quick profits.
She identified potential investors through friends, family, real estate networks, marketing seminars and church, according to court records.
She claimed she had developed a trading algorithm for short selling stocks that could double investors’ money within two months and generate 350% profits in a year.
She lulled investors into believing they were getting the promised results by creating online accounts that displayed fictitious results.
But most of the $5.7 million was not invested, according to the SEC. About $3.9 million was used to pay distributions in Ponzi-like manner, where early investors are paid with funds obtained from later investors, to create the illusion of profitability.
About $450,000 was used for personal expenses such as real estate, cars, hotels, clothing, luxury gifts and a cruise with friends.
The funds that were invested performed poorly.
Liston hid trading losses from her investors, according to the SEC lawsuit, “while simultaneously boasting of her investment savvy and recruiting new investors based on false claims (of) positive investment returns.”
This past September, Liston consented to sanctions, as well as disgorgement of ill-gotten gains and a civil penalty, in the Florida lawsuit. The SEC says it has been unable to calculate the monetary damages because of the federal government shutdown from Oct. 1 to Nov. 12.
Now Liston is working diligently to find documents the SEC needs for its assessments, the agency states in a March 3 request for an extension to June 10.
