SEC Freezes Assets of Investment Salesman
The Securities and Exchange Commission on Monday froze the assets of the once high-profile investment pitchman Stephen J. Murphy to halt an allegedly fraudulent scheme involving limited-partnership sales.
Author of the investment advice book “Formerly One Up on Trump,” Murphy has been using the alias Jack Davis since last June to sell partnerships in automated teller machines, the SEC alleges. He also failed to disclose to investors that he previously violated securities laws, officials said.
“This individual is selling securities to individuals and falsely stating his identity and his history,” said William E. White of the SEC’s Los Angeles office. White said it was not clear how many investors are involved or how big the losses could be.
Murphy, of Playa del Rey, could not be reached for comment.
In September 1993, the SEC accused him of securities fraud and using money raised from investors in a “Ponzi-like scheme,” where new investment money pays off old investors. In 1994, the SEC revoked Murphy’s investment advisor license and a company Murphy owned, American Capital Investments Inc., was put into receivership.
The SEC alleges that in the latest scheme, Murphy promised investors 203% returns and said he would raise $2.8 million through limited partnerships controlled by his Culver City company ATM Global Inc. The partnerships would then acquire and operate automated teller machines nationwide, the SEC said. On Tuesday, the phone number at ATM Global was disconnected.
An aggressive self-promoter, Murphy touted himself and his investment books during the early 1990s in full-page ads in the Los Angeles Times, New York Times and the Wall Street Journal.
Murphy, who portrayed himself as a former homeless Vietnam veteran and recovering alcoholic, told his rags-to-riches tale on such TV and radio programs as “Larry King Live.”
“I have slept behind garbage cans. I have slept in parks. I have slept in abandoned construction sites,” Murphy told The Times in a 1993 interview. Murphy also ran a nonprofit group that purchased homes for veterans recovering from substance abuse.
In 1993, Murphy changed the title of his investment advice book “One Up on Trump” to “Formerly One Up on Trump” to appease New York real estate mogul Donald Trump.
