By Grant McCool
NEW YORK, March 4 (Reuters) - Sean David Morton, a psychicand self-described "America"s Prophet," apparently did not seeinvestigators coming when he touted investments.
The U.S. Securities and Exchange Commission sued Morton,51, on Thursday on civil fraud charges, accusing him offraudulently raising more than $6 million from more than 100investors for Delphi Investment Group in 2006 and 2007.
"In soliciting these individuals, Morton claimed that hewould use his psychic expertise to provide investment guidanceto his investment team, and falsely touted his historicalsuccess in psychically predicting the various rises and fallsof the market," the complaint filed in Manhattan federal courtsaid.
The U.S. market regulator"s lawsuit said Morton and hiswife Melissa Morton, 42, diverted investor money, including atleast $240,000 to their own non-profit religious organization,Prophecy Research Institute (PRI).
It said Morton enticed investors through a monthly DelphiAssociates Newsletter, a web site and public appearances in NewYork City and elsewhere. He also broadcasts on a nationallysyndicated radio show with an average audience of nearly 3million listeners, the SEC said.
It quoted from a July 20, 2006 newsletter, which said: "Ihave called ALL the highs and lows of the market, giving EXACTDATES for rises and crashes over the last 14 years."
Morton is representing himself and could not immediately bereached for comment by phone or email at his Hermosa Beach,California, organization Heaven Earth LLC.
Morton hosted "financial survival" workshops at the MountShasta Resort in California in September 2007, where he toldprospectives investors he could make them "piles of money,"according to the complaint.
Morton placed investor"s money in shell companies Vajra, 27Investments and Magic Eight Ball, controlled by him and hiswife. She was also named as a defendant in the complaint.
"While Morton promised investors that all of their fundswould be used to trade foreign currencies, in fact, he investedonly about half with foreign currency trading firms," the SECsaid.
The Mortons are defendants in two pending private civilactions, the SEC said. The market regulator is asking the courtto order disgorgement of any ill-gotten gains and fines undersecurities laws.
The case is SEC v Sean David Morton et al, U.S. DistrictCourt for the Southern District of New York, No. 10-1720. (Reporting by Grant McCool, editing by Gerald E. McCormick)
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