A Scottsdale investment adviser who told his clients he was taking a personal sabbatical was actually about to begin a 12-month jail sentence for a DUI crash that injured passengers in another vehicle, according to Arizona securities regulators. The Arizona Corporation Commission has now revoked Paul Marascalco's investment adviser license and ordered him to pay a $2,500 penalty, finding he misled clients about his absence and then failed to disclose his felony conviction on mandatory state filings.
Marascalco, who owned Paul Marascalco Registered Investment Advisor since 2015, pleaded guilty in September 2021 to a felony tied to driving while intoxicated and causing a collision that injured passengers in another car, according to the Arizona Corporation Commission. As part of his plea agreement, he was sentenced to 12 months behind bars. Before his jail term, he emailed clients to say he would be taking a temporary personal leave, similar to a sabbatical, the commission found.
What Marascalco Told Clients Versus What Regulators Found
In that message, Marascalco announced that another investment adviser would oversee client accounts during his absence, and he assured clients he would remain involved in all decisions and trades touching their money, as reported by KTAR News 92.3 FM. What he did not disclose, per the commission, was that he would be incarcerated, or that his continued involvement in client accounts would be extremely unlikely while in jail. One client eventually discovered Marascalco's felony conviction independently and ended the relationship with the firm, saying they felt Marascalco and his company had been dishonest about the reason for his absence.
The client communications were only part of the violation. The commission also found that Marascalco failed to disclose his conviction in mandatory regulatory filings in both 2025 and 2026, filings that per the commission require disclosure of felony convictions from the previous ten years. That reporting duty flows from Item 11 of Form ADV Part 1A, which requires all state- and SEC-registered investment advisers to report felony convictions or guilty pleas from the prior decade through the national Investment Adviser Registration Depository system, according to the U.S. Securities and Exchange Commission.
How the Case Moved Through Arizona's Regulatory Pipeline
The Arizona Corporation Commission Securities Division formally opened enforcement proceedings against Marascalco on May 15, 2026, under Docket No. S-21400A-26-0193. Following multiple stipulated time extensions granted between May and July 2026, the commission revoked his license.
The commission determined that Marascalco's conduct amounted to dishonest and unethical practices in the securities industry and constituted a violation of the state's Investment Management Act. The $2,500 penalty is modest by the standards of major financial fraud cases, and the commission revoked his license.
Where the Penalty Money Goes, and What Happens If It Isn't Paid
Under Arizona Revised Statutes § 44-2036(B), administrative financial penalties collected by the commission for securities and investment advisory violations are deposited directly into the state's general fund, according to attorney Robert D. Mitchell. If a penalty goes unpaid, the same statute's subsection (C) allows certified copies of the commission's administrative orders to be filed with any county Superior Court Clerk, giving the decision the same legal force as a civil court judgment.
Marascalco operated his firm out of Scottsdale.
