Michael Oppenheim, a former JP Morgan advisor, has been charged by federal authorities for allegedly stealing $20 million from client accounts. On over twenty occasions, Oppenheim withdrew money, anywhere from $300,000 to $2 million at a time, from clients accounts and deposited the monies into his own personal account. Oppenheim was able to carry out the fraud by providing customers with false account statements which made it appear their monies were invested in bonds. JP Morgan has pledged to reimburse victimized clients.
Financial coach and author, Bryan Binkholder, has been sentenced to nine years in prison for soliciting clients to participate in his "hard money lending" program. Prosecutors allege that the program was falsely described as a real estate investment in which Binkholder would allegedly act as a bank to developers. While Binkholder did make some loans to real estate developers, he used the majority of the money for his own personal expenses. Binkholder's sentence also requires him to pay over $3.6 million in restitution. Binkholder allegedly is planning on appealing the sentence.
The Financial Industry Regulatory Authority (FINRA) has ordered Oppenheimer & Co. to pay a fine of $2.5 million and make restitution in the amount of $1.25 million for failing to properly supervise Mark Hotton, a financial advisor employed by the firm. Hotton is currently serving a 34 month prison sentence. According to FINRA, Oppenheimer ignored numerous red flags regarding Hotton which warranted heightened supervision measures. The lack of supervision allowed Hutton to wire over $2.9 million of client monies into his own accounts. Hotton's actions have caused Oppenheimer to pay more than $6 million to settle customer disputes.
Morgan Stanley advisor Ami Forte is accused of having an affair with the now deceased co-founder of the Home Shopping Network, Roy Speer. According to Mr. Speer's widow, at the time of his death, her husband was both physically and mentally impaired. He was wheelchair bound with a full time caregiver. His declining mental capacity made it difficult for him to oversee his financial matters, so he delegated Forte to take care of some of his financial matters. Mr. Speer's widow is now accusing Forte of making approximately 12,000 unauthorized trades in a five year period leading up to his death. These trades produced almost $40 million in commissions.
Matthew Haab, president of Partners Inc., faces charges by the Securities and Exchange Commission (SEC) for allegedly running a Ponzi scheme. The SEC believes that Haab deceived eighty of his clients into investing in loans to farmers. The clients were told that the loans would be used to aid farmers in the 2013-2014 growing season. As a result, Haab and his firm was able to raise about $15 million through the scheme. Nearly half of the money earned went to past investors. According to a Wall Street Journal report, "$800,000 went to Mr. Haab and two other advisers, Jeffrey Risinger and Tobin Senefeld, in undisclosed fees." The SEC has frozen all accounts related to the scheme.
Will Allen, former Giants cornerback, has been sued by the Securities and Exchange Commission (SEC) after allegedly operating a Ponzi scheme. The SEC claims that Allen and his partner carried out the scheme in order to satisfy a $7 million debt. The investors believed that they were making loans to professional athletes and would be earning up to 18% on the loan. However, in reality, a large portion of the investor money was siphoned off to pay the pre-existing personal debt.
Twenty-four thousand of Ameriprise Financial Inc.'s past and present employees have settled their case against Ameriprise for $27.5 million. The retirement plan participants claimed that they were charged excessive fees by Ameriprise. The participants alleged that Ameriprise failed to ensure reasonable fees for the administrative services provided. The settlement also states that Ameriprise will charge a flat administrative fee for each participant, incorporate more fee disclosures, and make efforts to find the most economical investment options.