Securities Headlines: Ohio Financial Adviser Faces Criminal Charges, Petters Ponzi Scam Investors Still Waiting for Their Money, and FINRA Recommends Disciplinary Action Against Ex-Jefferies Bond Trader

Ohio Financial Adviser is Indicted in $15M Securities Fraud
Evolution Partners Wealth Management owner Larry Werbel has been indicted on criminal charges accusing him of involvement in a securities scam to bilk at least 100 investor of over $15M. Werbel recruited investors for shares of VgTel Inc. He and other brokers purportedly promised high dividends even though the shares were sold and purchased by companies belonging to the alleged scammers so that they could artificially inflate the share price.

According to prosecutors, over $9M of investor funds were pockets by the fraudsters. Werbel, who prosecutors say got investors to purchase $3M in VgTel shares, received over $300K in kickbacks.

He is charged with securities fraud, conspiracy to commit securities fraud and wire fraud, investment adviser fraud, wire fraud, and making false statements to federal officers. Werbel claims he is innocent.

Meantime, the man accused of masterminding the securities scam, Edward Durante, was arrested in Germany and brought back to the US last month. He previously was convicted of securities fraud in 2011. The U.S. Securities and Exchange Commission has filed a civil case against Evolution Partners, Durante, and others.

Victims of Petters Ponzi Scam Have Yet to Recoup Their Money
Investors who sustained losses in Tom Petters’ $3B Ponzi scam are still waiting to get their funds back. Their claims go as far back as 2008, when Petters was accused of the fraud. He is now serving 50 years behind bars.

Now, Chapter 11 trustee Doug Kelly and several principal creditors of Petters’ scam have filed a plan of liquidation with the US Bankruptcy Court. The proposed strategy involves transferring $160M of assets to a liquidating trust. Kelly will be place in charge of said trust and will continue trying to pay distributions to creditors.

Petters, once a business mogul, controlled Polaroid, Sun Country Airlines, Petters Co., and other businesses. Petters Co. was a Ponzi scam that bilked investors of funds.

Investors were under the impression that their money was being used to buy and sell consumer electronic for profit. Instead, the funds were diverted to Petters’ business ventures.

FINRA Wants Ex-Jefferies Bond Trading Chief Disciplined Over Failure to Properly Supervise Mortgage-Bond Traders
The Financial Industry Regulatory Authority has sent William H. Jennings, the ex-co-head of fixed-income at Jefferies LLC (JEF) a regulatory notice recommending that he be subject to disciplinary action for not properly supervising mortgage bond traders and failing to enforce a “reasonable supervisory system.” This type of recommendation is usually sent ahead of a formal complaint unless an alternative agreement is reached before then.

According to FINRA, on four occasions, Jennings did not “reasonably and properly supervise” employees. This allowed them to be able to make false statements, nor did he correct the false statements made to customers about mortgage-backed securities. His lawyer disputes the allegations.

Please contact our stockbroker fraud law firm today if you suspect you were the victim of fraud.

Chagrin Falls financial adviser indicted in $15 million investment scheme, Cleveland.com, January 8, 2016

Tom Petters trustee files plan of liquidation, Twin Cities, January 5, 2016
Former Jefferies Bond-Trading Chief Recommended for Discipline, Bloomberg, January 15, 2015