The Securities and Exchange Commission is suing a Colleyville man accused of misleading dozens of investors in his Frisco day-trading school.
The complaint was filed Monday in federal court against Thomas J. Caufield, owner of DAT Capital Advisors, LLC. Caufield told investors he would use their money to provide student loans at his investment education franchise in Frisco, according to the SEC complaint and another lawsuit.
Instead, he used a "large portion of the funds for other purposes — including paying returns to earlier investors and paying past-due franchise expenses," the SEC lawsuit said.
The federal complaint said Caufield, 59, raised nearly $6.8 million from investors between 2013 to 2017. Those offerings were not registered with the SEC.
"Investors should view the terms safe, secure, and high returns — when used together in an offering — with great skepticism," said Shamoil T. Shipchandler, the SEC's Fort Worth Regional director, in a written statement. "They are often used as bait for the unsuspecting."
Caufield declined to comment about the SEC complaint or other litigation.
Without admitting or denying the SEC's allegations, Caufield agreed to repay $614,815.14, plus $126,032.11 in interest. That money was raised through the sale of his franchise and returned to investors. He also agreed to a $160,000 civil penalty, according to the SEC.
"He [Caufield] also misled investors about the franchise's financial condition and the safety of the investments," according to the SEC lawsuit.
The offering promised 10 to 18 percent annual returns paid from the profits of the Dallas franchise of Online Trading Academy. But that school was staying afloat only with the help of investor funds, the complaint said.
Caufield also falsely claimed the notes were secured with the school's business assets and didn't disclose to investors that the franchise "routinely failed to meet its current financial obligations," according to the lawsuit.
The Online Trading Academy Dallas was sold to a new franchisee this year. Caufield had been working as an investment adviser since the mid-1980s but is now listed as retired on his LinkedIn profile.
Besides the SEC complaint, Caufield has been sued by at least one other former investor. Ohio resident Gary G. Flick said in a lawsuit that he invested $700,000 in what turned out to be a "shell game."