Broker Misappropriation

Are You The Victim of Broker Misappropriation?

Financial Advisor Theft Isn’t Just A Crime It May Be Grounds for Filing a Securities Fraud Lawsuit

For more than three decades, Shepherd Smith Edward and Kantas (investorlawyers.com) has represented investors against the bad brokers who have stolen their money and the broker-dealers who failed to stop or prevent this type of securities fraud from happening. Unfortunately, stockbroker misappropriation happens and is even committed by registered representatives from reputable financial firms.

For instance, ex-JP Morgan registered representative Kevin Chiu is accused of embezzling $1.6M from clients, which has led to criminal charges. While JP Morgan Securities has compensated those who were harmed, the broker fraud wasn’t detected until the firm made the “mistake” of sending one elder investor’s statement to her home in Israel while Chiu sent her another with a much different sum listed to her home in Brooklyn. As Shepherd Smith Edwards and Kantas Senior partner and stockbroker theft attorney Sam Edwards notes in FinancialPlanning, were it not for the error of sending the client’s statement to her address abroad, which she requested that they not do, “Chiu’s alleged misdeeds would not have been uncovered.” Edwards is also a former Public Investor Advocates Bar Association president.

What Are Examples of Broker Theft?

Stockbroker misappropriation may involve a financial advisor bilking multiple victims or just a single investor. Common examples of broker theft:

• Recommending unauthorized, unregistered investments without the broker-dealer’s knowledge – a practice known as selling away—and then stealing the funds.
• Asking an investor to write a check to an account the broker directly controls.
• Borrowing funds from customers, which financial advisors generally aren’t supposed to do anyways, and then pocketing the funds or never paying the client back.
• Gaining power of attorney over an elderly or sick investor’s assets and then stealing the money. This is also called elder financial abuse.
• Running a Ponzi scam in which the stockbroker isn’t actually investing customers’ money. They are instead taking the funds while paying the victims “returns” that are, in fact, money from other investors.

When Failure To Supervise Enables Stockbroker Fraud

In an ideal world, brokerage firms would properly supervise their financial advisors, including their activities in customers’ accounts. They would also be able to identify red flags indicating allegedly bad behavior by their registered representatives and stop or prevent any financial advisor misconduct. Unfortunately, failure to supervise is also an all too common reason for investor losses.

How Can Our Broker Misappropriation Attorneys Help?

With over a combined 100 years’ worth of experience in securities law and the securities industry, Shepherd Smith Edwards and Kantas has the knowledge and resources to go after even the largest Wall Street firms on behalf of investors. Many of our savvy broker misappropriation lawyers are former financial advisors who are familiar with the unsavory practices employed within that industry. It is why we left and have founded a law practice exclusively dedicated to fighting for investors while protecting their legal rights to financial recovery.

Call (800) 259-9010 today to request your free, no-obligation case assessment.