Investment Adviser Charged with TARP Fraud

WASHINGTON — The SEC charged Gordon B. Grigg and his firm ProTrust Management Inc. for allegedly defrauding clients out of at least $6.5 million and misrepresenting that their money was invested in the federal government’s Troubled Asset Relief Program and other securities that do not exist.

The SEC alleged that Grigg obtained control over funds of at least 27 clients since 2007 and falsely claimed to have invested their money in securities described as “private placements.” Grigg created fraudulent account statements reflecting his clients’ ownership of these non-existent securities, the SEC said. He also began falsely claiming in December that ProTrust had the ability to invest client funds in government-guaranteed commercial paper and bank debt as part of the TARP program. Grigg also falsely claimed to have partnerships and other business relationships with several of the nation’s top investment firms.