Syed Arham Arbab, 22, admitted to defrauding 117 investors of thousands of dollars, and faces up to five years in prison.
Troy University has suspended all new member activities at campus fraternities as officials review policies on hazing.
"We cannot in good conscience be members of an organization with such a painful history," Phi Psi wrote in a Facebook post.
"I am appalled and shaken by this and deeply concerned for all members of our community," Chancellor Kent Syverud said.
The Beta Zeta chapter of the Pi Kappa Alpha fraternity were suspended for at least four and a half years.
After student protests over Trump messages written in chalk at Emory University, Trump supporters at other campuses have embarked on "The Chalkening."
Police and university officials are investigating Penn State's Kappa Delta Rho fraternity over two Facebook groups created by fraternity members that had pictures of naked women apparently taken without their consent.
It may leave the university open to the charge that he did not offer due process.
After Rolling Stone published a story about an alleged assault of a freshman woman by seven men, all fraternities will be suspended until January.
"Drunk Female Guests Are the Gravest Threat to Fraternities," argued a soon-deleted column on Forbes.com.