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Stephen S. Eubanks Sentenced to Prison, Ordered to Pay Restitution for Wire Fraud Scheme

Former broker Stephen Skeffington Eubanks of Bright Trading, LLC's Las Vegas, Nevada branch received a 30-month prison sentence and $437,609 restitution order after a US District Court found him guilty of wire fraud.

According to prosecutors, Eubanks (CRD #2291133) posed as a hedge fund manager and opened Eubiquity Capital LLC in February 2010, taking in more than $700,000 from investors by 2016. The findings state Eubanks solicited or received these investments from clients throughout the country, and, in total, defrauded more than 20 people.

A report described Eubanks' operation as a Ponzi scheme at times, noting that Eubanks on occasion used money deposited by newer investors to pay returns to earlier investors.

At other times, the report notes, Eubanks used "a significant portion" of the investments to pay personal expenses.

Prosecutors said in order to conceal the misconduct, Eubanks fabricated account statements or repurposed used statements from unrelated accounts so as to deceive his clients into believing that their money was performing well.

Eubanks' FINRA BrokerCheck report indicates that in August 2016, the Chicago Stock Exchange initiated an investigation into Eubanks' failure to report an outside business activity—namely, Eubiquity Capital LLC.

Later that month, Bright Trading LLC discharged him for his failure to report ownership of Eubiquity Capital, and the Massachusetts Securities Division barred him from trading securities in the state and ordered $75,000 in disgorgment for violations of Massachusetts general laws pertaining to fraud, dishonest/unethical practices, and selling an unregistered offering as an unregistered investment adviser.

In April 2017, a customer filed a complaint seeking $356,730 in damages, alleging that Eubanks engaged in "risky trading activity," which, along with commissions and fees, caused the depletion of the customer's investment account held at Bright Trading, LLC.

The customer also accused Bright Trading of failing to monitor the outside business activity of an associated person.

In 2007, a former customer of Eubanks' when he was associated with Oppenheimer & Co. Inc. alleged unauthorized transactions in over-the-counter equities, resulting in an arbitration award of $190,000. In 2006, an unauthorized trading complaint resulted in a $4,512.80 settlement.

If you have invested with former Bright Trading, LLC (Las Vegas) broker Stephen Skeffington Eubanks, or with any registered representative or financial adviser whose undisclosed and unauthorized outside business activity has contributed to a loss of investment funds through fraud or other means of misconduct, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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