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SEC sues Calif. investment advisor

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The Securities and Exchange Commission has sued a California investment advisor for defrauding two clients of at least $274,256. According to the SEC, the advisor allegedly misappropriated $243,250 from a college student who asked him to manage $470,000 from her deceased mother’s life insurance policy. He also stole $31,000 from a family friend in two transactions that drained the client’s account of 95% of its funds. The SEC also alleged that the advisor charged inflated advisory fees as high as 12.9% vs. the 0.5% to 2% disclosed in his client agreements.

A Louisiana insurance agent was arrested for engaging in fraudulent insurance practices. Apparently the agent failed to remit insurance premiums given to him by his customers on at least two occasions. According to the Louisiana state police, the agent also altered the effective dates on a proof of insurance card and failed to refund money due his clients from their respective insurance companies. The Louisiana Department of Insurance issued the agent a cease and desist order, prohibiting him from selling insurance in the state.

A Seattle broker was permanently barred from the securities business for defrauding at least 38 clients of at least $8 million through a scheme that involved converting client funds to her personal use while sending falsified account statements to her customers. According to FINRA, the broker persuaded her clients to liquidate their existing investments for the purpose of purchasing mutual funds and annuities through her. At her request, the clients made their checks payable to her investment advisory firm. She deposited those checks in a bank account that she controlled and, instead of purchasing investments for her clients, diverted their funds to her personal use. The broker is facing criminal charges in Seattle’s U.S. District Court.


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