A district court judge in Georgia has ordered a former broker to pay roughly $1.9 million for taking some $1.7 million from at least seven investors.
The judgment, released late Thursday, was entered against Blake Richards, an ex-advisor affiliated with LPL Financial (LPLA) from 2009 to 2013. Earlier, he traded securities through Ameriprise Financial (AMP), A.G. Edwards and Edward Jones, FINRA records show.
“The majority of the misappropriated funds constituted retirement savings and/or life insurance proceeds from deceased spouses,” the SEC said in its summary report. “Richards then instructed investors to write out checks to entities under his control with the understanding that Richards would invest their funds in fixed-income assets, variable annuities and/or common stock, and that none of these investments were made as represented.”
These investments did not appear on the clients’ brokerage account statements, according to the SEC. Richards didn’t receive any commission income from them, but he “siphoned off the funds entrusted to him for his personal use,” regulators said.
For its part, LPL Financial says one of its advisors informed the firm of allegations that Richards had misappropriated funds from certain LPL customers on May 1, 2013. The firm then launched an internal investigation and fired Richards on May 3, according to a spokesperson.