UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin Release 34-80183/IA Release 4662/March 9, 2017: The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) and Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act) against Patrick Churchville. On August 4, 2016, Churchville pled guilty to five counts of wire fraud in violation of Title 18 of the United States Code, Section 1343, and one count of tax evasion in violation of Title 26 of the United States Code, Section 7201, before the United States District Court for the District of Rhode Island, in United States v. Patrick Churchville, Crim. Case No. 16-CR-0068.

Order

Bar (Permanent)

any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or NRSRO

Indefinite

3/9/2017

Participating in any offering of a penny stock

Indefinite

3/9/2017

wire fraud

Convicted

tax evasion

Convicted

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC LITIGATION RELEASE 23255, MAY 8, 2015: THE SECURITIES AND EXCHANGE COMMISSION ANNOUNCED FRAUD CHARGES AGAINST A RHODE ISLAND INVESTMENT ADVISER AND ITS PRESIDENT AND OWNER, PATRICK EVANS CHURCHVILLE, FOR OPERATING A FRAUDULENT SCHEME THAT RESULTED IN AT LEAST $11 MILLION IN LOSSES TO INVESTORS. ACCORDING TO THE SEC'S COMPLAINT, THE INVESTMENT ADVISER AND CHURCHVILLE DIVERTED DEPOSITS FROM NEW INVESTORS TO PAY PRIOR INVESTORS, USED PROCEEDS FROM SELLING PARTICULAR INVESTMENTS TO PAY UNRELATED INVESTORS, USED INVESTORS' FUNDS AS COLLATERAL FOR LOANS TO MAKE INVESTMENTS FOR THEIR OWN BENEFIT, USED OTHER INVESTORS' MONEY TO REPAY THE LOANS, CONVERTED INVESTOR FUNDS INTO INVESTMENTS FOR INVESTMENT ADVISER'S OWN BENEFIT, AND STOLE $2.5 MILLION OF INVESTOR FUNDS TO PURCHASE CHURCHVILLE'S WATERFRONT HOME. THE COMPLAINT ALLEGES THAT CHURCHVILLE AND THE INVESTMENT ADVISER USED A VARIETY OF DECEPTIVE ACTS AND MISLEADING ACCOUNTING TRICKS TO CONCEAL THEIR FRAUD FROM AUDITORS, ACCOUNTANTS, FUND ADMINISTRATORS, AND THEIR OWN STAFF. THE SEC'S COMPLAINT ALLEGES THAT, WHEN MANY OF INVESTMENT ADVISER'S INVESTORS REQUESTED DISTRIBUTIONS OF THEIR INVESTMENTS, CHURCHVILLE PROLONGED THE SCHEME BY LYING TO INVESTORS ABOUT THE STATUS, WORTH, AND DISPOSITION OF THOSE INVESTMENTS. THE INVESTMENT ADVISER AND CHURCHVILLE ALLEGEDLY MISAPPROPRIATED AND MISUSED INVESTORS' CASH AND ASSETS THROUGH A YEARS-LONG SCHEME THAT LULLED INVESTORS INTO BELIEVING THAT THEIR ASSETS WERE SAFE. THE SEC'S COMPLAINT CHARGES CHURCHVILLE WITH VIOLATING SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER, SECTION 17(A) OF THE SECURITIES ACT OF 1933, SECTIONS 206(1), 206(2), AND 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT") AND RULE 206(4)-8 THEREUNDER. THE COMPLAINT FURTHER CHARGES CHURCHVILLE WITH AIDING AND ABETTING THE INVESTMENT ADVISER'S VIOLATIONS OF SECTION 206(4) OF THE ADVISERS ACT AND RULES 206(4)-2 AND 206(4)-7 THEREUNDER.

Judgment Rendered

Civil and Administrative Penalty(ies)/Fine(s)

Disgorgement

$29,103,738.00

Monetary Penalty other than Fines

Injunction

COMPLAINANT ENTERED INTO AN INVESTMENT ADVISORY AGREEMENT WITH PATRICK CHURCHVILLE ON 2/1/2008. COMPLAINANT ALLEGES THAT PATRICK CHURCHVILLE VIOLATED HIS FIDUCIARY DUTY OWED TO HER BY SHORTING U.S. TREASURY BONDS ON TWO SEPARATE OCCASIONS (ON 4/23/2010 AND 6/25/2010) THAT WERE CONTRARY TO HER STATED INVESTMENT OBJECTIVES.

$200,000.00