DOWNTOWN — A Santa Monica financial adviser was arrested on Tuesday for his involvement in a stock market scheme that generated $30 million in illegal profits, federal prosecutors said.

Grover Henry Colin Nix IV, who headed Santa Monica-based Calbridge Capital LLC, plead not guilty in his initial federal court appearance and is currently being held without bond.

Attempts to reach Calbridge Capital were unsuccessful.

Federal authorities arrested 14 people this week who were named in two indictments that allege long-term stock manipulation that resulted in 20,000 investors losing $30 million.

The 39-year-old Nix, along with 13 other businessmen, is now facing charges of money laundering, wire fraud and securities fraud. Due to the large sum of money and the severity of the crimes, Nix and others are facing possible life sentences, said Thom Mrozek, spokesmen for the Department of Justice.

“It’s up to the sentencing judge,” he said.

One indictment alleges that nine defendants conspired to commit securities and wire fraud in which members of the scheme generated $13 million in illegal profits. Nix, along with four others, are also alleged to have engaged in using funds transferred from offshore accounts to promote their fraudulent scheme.

“The defendants’ alleged combination of celebrities, press releases, gimmicks and lies was similar to how a magician deceives unsuspecting believers into an illusion,” said Bill Lewis, assistant director in charge of the FBI’s Los Angeles Field Office.

The second indictment concerns a stock manipulation allegedly headed by Regis Possino, a former L.A. County deputy district attorney, and Nix.

The Possino indictment alleges that members of the conspiracy made at least $18 million in illegal profits from selling their shares of manipulated companies.

A company CEO brought into one of the schemes summed up a typical deal during a wiretapped call: “There’s nothing in there, there’s nothing to the company. It’s monkey business.”

Nix is scheduled to have his detention hearing next week in U.S. District Court. Trial dates for both cases were scheduled for April 9 in Los Angeles.

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