A Texas investment professional faces up to 20 years in prison and a $45 million fine for securities fraud when he comes up for sentencing on July 23, 2010. The advisor misled 500 Texas and Florida investors, many of whom were retired, into buying more than $50 million of fraudulent investments. He falsely told investors a commercial bank guaranteed the investments and that Allianz and Lloyd’s of London were the reinsurers. He told them that “Fraud and Dishonesty” insurance protected up to $100,000 per account, and gave investors a letter claiming the securities were “a perfect investment vehicle for someone in a conservative financial position.” Finally, he falsely claimed to hold a Wharton MBA and failed to disclose that FINRA had expelled him from the business some years before.

The state of Tennessee has indicted two owners, an officer, and an employee of a nonprofit foundation in connection with a multi-million dollar, multi-state annuities scam. Tennessee authorities allege the four scammers enticed seniors to replace legitimate deferred annuities with bogus “charitable gift” annuities. They claimed their so-called “installment plan” would give seniors a generous tax deduction. Instead, it gave the scammers a $31 million cash pool for buying luxury items and vacations. If convicted, the defendants each face up to 12 years in prison and up to $250,000 in fines. The state insurance department worked with banks and insurance agents to recover and return about $15 million of the stolen money.

FINRA permanently barred a life insurance sales manager for misappropriating over $1.9 million in client funds. The manager also made false statements and sent doctored account statements and other documents to his customers to hide his scheme. According to FINRA, the manager persuaded 14 clients to invest in fictitious financial products over at least a seven-year period. Thinking they were making legitimate investments, the clients wrote checks to the life insurance company, which the manager diverted for personal use.