IBJNews

SEC charges Noblesville man in $6M investment scheme

Back to TopCommentsE-mailPrintBookmark and Share

The Securities and Exchange Commission on Monday charged a Noblesville man with defrauding investors in a scheme that targeted retirement savings.

John K. Marcum, 49, portrayed himself as a trader and asset manager to raise more than $6 million from at least 37 investors in six states through his company, Guaranty Reserves Trust, the SEC alleges.

Starting in 2010, Marcum helped investors set up individual retirement accounts and gained control over their retirement assets, saying he would earn them big returns by day-trading in stocks while guaranteeing the safety of their principal investment.  However, the SEC said, Marcum did little actual trading and lost money when he did.

According to the charges, Marcum gave investors false account statements showing they were earning annual returns of more than 20 percent while he was using the funds to pay for a "luxurious personal lifestyle and finance several start-up companies."

The SEC said it has obtained an emergency court order to freeze the assets of Marcum and his company.

“Marcum tricked investors into putting their retirement nest eggs in his hands by portraying himself as a talented trader who could earn high returns while eliminating the risk of loss,” said Timothy L. Warren, acting director of the SEC's Chicago Regional Office. “Marcum tried to carry on his charade of success even after he squandered nearly all of the funds from investors.”

The SEC said Marcum used $3 million as collateral for a line of credit at the brokerage firm where he previously worked to to fund unprofitable ventures such as a bridal store, a bounty hunter reality TV show, and a soul food restaurant operated by the bounty hunters. None of the investors knew their money was being used on such ventures.

Investigators also accuse Marcum of spending a half-million dollars to pay personal expenses including airline tickets, luxury car payments, hotel stays, sports and event tickets, and tabs at a Hollywood nightclub.

According to the SEC’s complaint, Marcum had a phone conversation with three investors in June and admitted that he had misappropriated investor funds and was unable to pay investors back. During this call, Marcum begged the investors for more time to recover their money. 

He offered to name them as beneficiaries on his life insurance policies, which he claimed included a “suicide clause” imposing a two-year waiting period for benefits. He suggested that if he was unsuccessful in returning their money, he would commit suicide to guarantee that they would eventually be repaid.

Marcum could not be reached for comment Monday.


 

ADVERTISEMENT

  • Not Lies
    Here's the SEC Complaint http://www.sec.gov/litigation/complaints/2013/comp-pr2013-164.pdf
  • All Lies
    I wish the IBJ would check facts before publishing such stuff. Are the newspapers that hard up for news that they would publish "allegations" ...lol I thought yellow journalism was over!
    • easy money
      It just blows my mind that anyone would hand over their life's savings to some huckster claiming to be a gifted day-trader. You'd have much better odds at a roulette table and at least get a few free drinks.
    • No Greater Love
      "There is no greater love, than to lay down one's life for money . . . ." . . . no . . . wait a minute . . . that's not right . . .

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    thisissue1-092914.jpg 092914

    Subscribe to IBJ
    1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

    2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

    3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

    4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

    5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

    ADVERTISEMENT