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Baltimore Securities & Estate Planning Law Blog

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.

SignalPoint Asset Management Fined $215,000 for Failure to Disclose Conflicts

The Securities and Exchange Commission (SEC) fined SignalPoint Asset Management after it allegedly failed to disclose conflicts of interest to their clients. The SEC claimed that SignalPoint misrepresented the source of funds used to start the business. The three principals of the company, Jonathan Timson, Dennis Walker, and John Handy Jr., as well as Comptroller Michael Orzel, all consented to the SEC fine without admitting or denying the allegations. The four men were fined a total of $215,000.

Cabot Investment Properties Lost $5 million of Investors Retirement Savings in TICs

Cabot Investment Properties and its principals, Carlton Cabot and Timothy Kroll, were charged with real estate fraud after allegedly loosing investor money in fraudulent tenancy-in-common (TIC) deals. The investors were looking for retirement income and invested over five million dollars in eight different fraudulent TICs, causing them to lose their money. The Secretary of the Commonwealth, William Galvin, also charged the defendants with funneling $9 million of investor funds into their own personal accounts, which he believes to have funded their lavish lifestyles.

Defiant Money Manager Banned from Securities Industry

Max E. Zavanelli, a Florida based money manager, was banned from the securities industry. An administrative law judge found that the SEC presented sufficient evidence to establish that Zavanelli provided misleading information to Morningstar. Zavanelli and his firm, ZPR Investment Management Inc., were also required to pay a fine totaling $660,000. The SEC believes that Zavanelli falsely reported his firm's compliance with the Global Investment Performance Standards in newsletters and advertisements. According to an Investment News report, Zavanelli refused to take responsibility for any of the allegations and was said to be extremely defiant throughout all the proceedings.

Chicago Advisor Earns Millions from Eight Year Ponzi Scheme

Chicago advisor Neal Goyal and his investment firms Caldera Advisors, LLC and Blue Horizon Asset Management, LLC are facing fraud charges after allegedly operating a Ponzi scheme. According to the SEC, Goyal falsely told investors that all of their money would be placed into funds that were invested in stocks. Goyal provided investors with false account statements and used new investor money to pay the older investors. An Investment News article reports that Goyal had accepted $11.4 million from 35 clients. He allegedly used the money on personal items including luxury cars, two homes and his wife's business ventures.

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