A financial advisor who was barred from the industry over allegations he misappropriated clients’ money is accused of defrauding investors again in a different scheme 30 years later.
Despite the SEC banning David W. Schamens in 1992 from association with any broker, dealer, municipal securities dealer, RIA or investment company, he was holding seminars through a business called “TradeStream University” and pitching a product he called the “TradeStream Algo Fund” to retail investors in 2019, according to the regulator’s March 7 complaint. Between the Algo Fund and at least four other investment vehicles and entities, Schamens defrauded 25 clients for $6.8 million in a Ponzi scheme over the last eight years, federal prosecutors say.
Schamens, a 64-year-old resident of Greensboro, North Carolina, now faces criminal charges of wire fraud, securities fraud and money laundering and a civil rap of fraud and other violations. The case offers the latest example of the problem of so-called recidivist bad actors who allegedly commit further misconduct after being dinged earlier in their careers, as well as “wandering brokers” who continue operating under different registrations after losing one. Despite strong rhetoric from regulators and the industry about their crackdowns against such bad actors and the mission of protecting investors, the cases remain a persistent issue.
“Unfortunately, financial services fraud recidivism is far too common and often with tragic…
