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…