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Baltimore Securities & Estate Planning Law Blog

Financial Author, Sherwin Brown, Indicted by SEC

After receiving a fine of more than $1.3 million in 2010, Sherwin Brown was barred from the securities industry. The Securities and Exchange Commission (SEC) recently indicted Brown, alleging that after his disbarment he had continued to act as a "money coach." The SEC alleges that Brown was charging clients for his financial advice. From the time that Brown was barred in 2011 until May 2014, Brown allegedly deposited $330,000 worth of clients' checks into his account.

Paul Greenwood Receives 10 Year Sentence

Paul Greenwood, a former co-owner of the New York Islanders, was sentenced to ten years in prison on fraud charges. From 1996 through the beginning of 2009, Greenwood and his business partner, Stephen Walsh, used the businesses that they operated, Westridge Capital Management Inc. and WG Trading Co. LP, to swindle funds from investors. The men allegedly cheated institutional investors out of more than a half-billion dollars. Greenwood used the money for a teddy bear collection, a controlling interest in the New York Islanders, and numerous other personal expenditures.

Former NBA Player Scores Arbitration Award

Former NBA player, Sam Young, was awarded $2 million after allegedly being defrauded by his broker, Jinesh "Hodge" Brahmbhatt. The fraud began in 2012 when Brahmbhatt advised Young to invest in unregistered promissory notes. The worthless notes were issued by CFP Group Inc. and also Success Trade Securities, Inc. Brahmbhatt had worked at Success Trade Securities, Inc. in Washington, D.C.

LPL Broker Ordered to Pay $2 million after Defrauding Clients

After allegedly bilking clients of almost $1.7 million, Blake B. Richards, a former LPL broker, was ordered to pay $2 million by Judge Willis B. Hunt, Jr. The Securities and Exchange Commission (SEC) first announced the charges against Richards in the summer of 2012. The SEC believes that Richards began advising at least seven clients to invest into funds and entities that he controlled. The investors were told that their funds would be reinvested into conservative investments, but in reality it was going to Richards to pay his own personal expenses. Richards allegedly kept up scam by creating fake statements for each of the clients. LPL has commented that they began an investigation and terminated him after another advisor had tipped the company off. In June 2013, shortly after he was terminated, Richards was also barred from the securities industry by the Financial Industry Regulatory Authority.

Raymond James Independent Advisor Barred after Embezzling Nearly $1 million from an Elderly Client

Jo Ellen Fisher, a former Peoples Bancorp employee and financial advisor for Raymond James, has officially been barred from the securities industry. Fisher was accused of embezzling almost $1 million from an elderly client. Fisher allegedly transferred $924,750 from a trust of the 95 year old investor to an account under her daughter's name. Fisher was then able to use that money on her own personal expenses, including her mortgage, cars, and jewelry. In her own defense, Fisher claimed that the client was her daughter's godfather and he wanted her daughter to have the money when she turned 21. FINRA claims that Ms. Fisher's defense is not supported by legitimate documents. Raymond James is now seeking $800,000 from Fisher. They have asked a federal judge to freeze all assets and accounts held by Fisher and to give them claim on all her assets.

The Holiday Season Brings the Potential for Scams and Fraud

As the holiday season approaches, it is important to be on the lookout for identity theft and financial scams. Those most likely to be targeted are those who are age 50 and older. This demographic is believed to be the most vulnerable and an easy target for a number of reasons including their potential to have a large retirement savings, and an established credit history. The use of the internet and email have made accounts and personal information even more accessible to scammers.

Oklahoma Court Orders New Arbitration After Investor is not Satisfied with Award

Earlier this month, an Oklahoma court ordered a new arbitration hearing for an investor's claims against Geary Securities Inc. Steven Admire argued that the arbitration panel failed to provide him with an adequate award of damages. Mr. Admire claimed a total of $1.6 million in damages and the panel only awarded him $9,900. Mr. Admire and his attorney do not want to go back through the arbitration process, instead they want the claims resolved through the court system.

Broker-Dealer to Pro Athletes Barred and Fined Nearly $14 million

Success Trade Securities, Inc. and its founder, Fuad Ahmed, were barred from the securities industry by a Financial Industry Regulatory Authority (FINRA) as a result of allegedly defrauding fifty-nine clients, many of which were pro athletes. FINRA also ordered the firm and Ahmed to pay $13.7 million in restitution to the investors. FINRA initiated its investigation in April 2013 when it became suspicious that Ahmed and his firm were operating a Ponzi scheme. Their suspicions caused them to file a complaint and a temporary cease and desist order to which Ahmed and the firm consented.

Former Raymond James Advisor Barred

The Financial Industry Regulatory Authority (FINRA) barred Claus Foerster, a former Raymond James advisor, for swindling about $3 million from clients through a Ponzi scheme. Foerster allegedly transferred funds from clients' brokerage accounts into a phantom income fund called "S.G. Investments." In reality, "S.G. Investments" was actually a bank account under Foerster's control which he used to pay personal expenses. FINRA believes that the scam began in 2000 and lasted up until June 2014. Foerster provided his clients with fabricated account statements and even paid monthly dividend payments on the fictitious fund to two of the clients.

Tom Clancy's Estate Attorney Faces Suit for 6 Million Dollar Mistake

clancy.jpgAccording to the Daily Record, Tom Clancy's widow, Alexandra Llewellyn Clancy, is attempting to remove J.W. Thompson Webb, Clancy's estate attorney, as personal representative of Clancy's estate. Clancy's estate is valued at a $83 million, a majority of which is Clancy's 12-percent-stake in the Baltimore Orioles. Mrs. Clancy claims that Webb made mistakes in preparing Clancy's will and estate plan which have cost the estate approximately $6 million in taxes. However, under Maryland law, a beneficiary of an estate cannot sue the attorney who drafted the will. The suit must be brought by the personal representative of the estate. Since Webb is both the drafter of the will at issue and the personal representative, Mrs. Clancy must first have Webb removed as personal representative in order to sue him on behalf of her late husband's estate.

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