SEC settles investment fraud case

Scottsdale man accused of using investors’ money

The federal Securities and Exchange Commission said it has reached a settlement with a Scottsdale wealth adviser after charging that he made false claims to upscale investors and misappropriated nearly $1.54 million of the $2.45 million he collected from them.

David A. Harbour, 45, raised money from four friends and business acquaintances, including one Arizona resident, between July 2014 and August 2016, which he then used to pay debts and for personal expenses, according to the SEC.

However, the SEC complaint also acknowledges that Harbour did provide $2.9 million in funding for an unnamed Native American consumer-lending business that was in development.

Harbour is a member of Thunderbirds Charities, the Phoenix group that organizes the Waste Management Phoenix Open, and is on the board of the Sun Devil Club, a booster group for Arizona State University student-athletes.

He was previously licensed as a stockbroker or registered representative, though he hasn’t been affiliated with a Wall Street firm since 2008.

The complaint alleges that he told investors that their money would be used to finance various businesses including the Native American consumer-lending entity. The four investors, who were not identified, are from Arizona, California, Texas and Illinois.

Harbour didn’t respond to requests for comment. But his attorney, Alan Baskin of Baskin Richards PLC in Phoenix, said his client is “happy that this is resolved and happy to put it behind him.”

Harbour told investors he would use their money exclusively for revenuegenerating businesses and promised annual returns of 12 to 20 percent, according to the SEC complaint, which was filed July 31 in U.S. District Court in Phoenix.

Instead, the agency alleges that he diverted substantial sums for personal uses that included paying off hundreds of thousands of dollars in credit-card debt and expenses for private jets,

cruises, resort vacations and for services from a plastic surgeon in Beverly Hills, California.

Some of the money was used to make payments on debts owed to investors in previous business ventures, according to the complaint. Harbour’s spending included shopping at Neiman Marcus, Costco, Target and Amazon.

Yet, the SEC complaint acknowledged that Harbour invested a significant sum in the tribal-lending entity. According to the SEC, one of his companies, Oak Tree Management, provided $2.9 million and was actively involved in the business until it was taken over by a third-party creditor in late 2016.

Even so, the SEC said, “(Harbour) knew, or was reckless in not knowing, that the representations he made regarding the use of investor funds were false or misleading.”

Without admitting or denying the allegations, Harbour agreed to pay roughly $3.17 million, the SEC said. That includes returning nearly $1.54 million in investor funds, a penalty of the same size and interest of $97,000, according to the SEC.