New HampshireDepartment of JusticeOffice of the Attorney General

News Release

For Immediate Release
August 10, 2015

Robert F. Adams, Assistant Attorney General
Consumer Protection Bureau
Financial Fraud Unit
(603) 271-2678
Jeffrey D. Spill, Deputy Director
New Hampshire Bureau of Securities Regulation
(603) 271-1467

Investment Advisor Sentenced to up to 7 Years in Prison for Fraud

Ordered to Pay $624,771.00 in Restitution to Victims

Attorney General Joseph A. Foster announces that Richard M. Higgins ("Higgins") of Stratham, NH was sentenced today in Merrimack County Superior Court to serve 5 to 14 years in prison after pleading guilty to one felony count of engaging in a course of conduct involving a scheme to defraud in connection with the purchase and sale of securities, and one felony count of a course of business that operated as fraud in connection with acting as an investment advisor.

The charges stem from a joint investigation by the Attorney General's Financial Fraud Unit and the Bureau of Securities Regulation ("BSR") into the defendant's fraudulent investment activities.

The investigation revealed that, beginning in late 2006 and continuing through August 2007, Higgins solicited investors for a pooled investment in the form of a limited partnership called "Higgins Equity Partners." Higgins was doing business as "Higgins Capital Management," and was to be the general partner and the investment advisor. To induce people to invest, Higgins made a number of false and misleading statements, both orally and in writing, enabling him to obtain $395,574.00 from the investors. The false and misleading statements included assurances that he was a registered investment advisor, and would be bonded as an added protection for the investors. Despite having passed the required investment advisor's examination, Higgins neither registered with the BSR nor obtained a bond as required by state law.

Higgins also told the investors that their funds would be placed in a brokerage account that bore the name of the limited partnership, when in fact their funds were put into an account solely in the name of Higgins Capital Management. As a consequence, the funds and any gains or losses on the funds became Higgins's. Higgins reported gains and losses in the brokerage account on his personal tax return, and used the investors' funds to pay his personal tax liability when there were gains. Higgins never provided the investors with the limited partnership tax forms he promised, and as a consequence the investors did not receive an accurate report of their gains and losses. Nor were the investors ever provided with an audit of their investment, as Higgins promised when he was soliciting them, which enabled him to conceal from the investors that he had paid himself approximately $365,558.00 in fees from the investors' funds.

During the seven year life of the investment, Higgins, while purportedly acting as their investment advisor, further defrauded the investors by providing them quarterly statements which regularly overstated the performance of their investments. During that period, Higgins provided the victims with at least 104 quarterly statements which falsely overstated the value of their investments. In March of 2013, Higgins reported gains to the investors of between 18 to 174%, when in fact most of the investors by then had actually experienced losses of between 80 to 91%. These false quarterly statements lulled the investors into not withdrawing their funds and resulted in some investors investing an additional $392,000.00. In addition to the false quarterly reports, Higgins, provided one investor with what purported to be a copy of a monthly statement for the brokerage account where the investors' funds had been deposited. The monthly statement given to the investor, however, was a forgery and overstated the remaining balance in the fund by $625,512.00. As a consequence, the investor gave Higgins an additional $307,000 to manage.

Most of the victims who gave Higgins money were at or near retirement. Higgins, however, frequently used their funds to invest in securities which were unsuitably risky for these investors, or which were traded in a manner which was unsuitable. Higgins kept a number of his victims invested in an inverse leveraged exchange trade fund for extended periods of time, contrary to the prospectus which emphasized that it was designed for investments of only one day at a time. The investors named in the indictments lost approximately $624,771.00 as a result of Higgins' conduct.

Pursuant to the fully negotiated plea agreement, Higgins was sentenced to serve 3½ to 7 years on the felony count involving fraud in connection with the purchase and sale of securities. He was sentenced to a consecutive sentence of 3½ to 7 years on the felony count involving investor advisor fraud, with two years of the minimum portion of that sentence suspended. He was ordered to make restitution to the named victims in the amount of $624,771.00 and was barred for life from employment in the securities industry.

Higgins simultaneously entered into a Consent Order with the BSR whereby Higgins agreed to pay additional restitution to victims totaling approximately $370,000.00, administrative penalties totaling $125,000.00, and a permanent cease and desist from violating New Hampshire securities laws.

The Bureau of Securities Regulation offers to the public videos and publications to help investors understand how to evaluate investments. Anyone with a question about a particular security or who thinks they may have been the victim of a scam or an unscrupulous broker or financial adviser can call the BSR hotline, TOLL FREE at 1-800-994-4200.

Consumers with consumer-related complaints or concerns can call the Attorney General's Consumer Information Line at 1-888-468-4454 or file a complaint online at

New Hampshire Department of Justice
1 Granite Place South | Concord, NH | 03301
Telephone: 603-271-3658