Case Conclusion Date: 01.01.2010
Practice Area: Securities and investment fraud
Outcome: $20,000,000 Judgment
Description: Facts- Eleven families individually hired their financial advisor. Several clients were in their 70â€™s or 80â€™s and suffering from various medical conditions including macular degeneration and early Alzheimer. The advisor systematically transferred all client funds from secure retirement accounts to variable or fixed annuities without conducting any type of suitability study. He then fraudulently withdrew funds claiming them to be taxes. Over the years the advisor withdrew funds from client accounts, many withdrawals were unauthorized. He convinced the clients to reinvest the funds in fraudulent mutual funds. He then cashed the checks and deposited the funds into his own personal account. He concealed the events by preparing false and misleading statements. The advisor fraudulently converted in excess of $5,000,000 to his own use. Disposition - The Court entered a judgment against defendants for $20,000,000 for Negligence, Breach of Fiduciary Duty, Fraudulent Misrepresentation, Statutory Conversion and treble damages. A FINRA claim is pending against Mutual Service Corporation, the broker/dealer supervising advisor.