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New Jersey Broker Faces Possible 3-Year Prison Term

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The Office of the Attorney General of New Jersey, which oversees the agency that has proposed the state’s new fiduciary rule, is recommending a three-year sentence in state prison for a Livingston, New Jersey, investment broker who pleaded guilty to stealing over $270,000 from an elderly couple.

Under the plea deal, Michael Alan Siegel must pay full restitution of $270,283 to the surviving member of the couple. He’s scheduled to be sentenced on Sept. 13.

Siegel worked with the couple from approximately July 2013 through January 2016 while employed first as an investment advisor representative at Concorde Asset Management and then as an agent at National Securities Corp. During some of that time he was also the sole owner, officer and director of NJLI, which is purportedly in the business of selling insurance and annuities, according to the civil case that the Bureau of Securities initially brought against Siegel, before referring the case to the Division of Criminal Justice.

Starting around January 2014, Siegel “encouraged the couple to invest in what he called an ‘options’ program that he characterized as a safe institutional trading program for preferred customers,” directing the couple to make their checks payable to Siegel rather his firm, according to the AG’s press release. The funds were never invested in an options program because it didn’t exist, and Siegel pocketed the money.

“Investors count on their brokers to act with honesty and integrity in managing their investments, but Siegel callously betrayed the trust of his victims …,” said Attorney General Gurbir Grewal in a statement. “We will continue to work with the Bureau of Securities to protect investors and ensure that dishonest brokers like Siegel face justice.”

Siegel “now faces a well-deserved prison sentence for his shameless exploitation of vulnerable investors,” said Christopher Gerold, chief of the state’s Bureau of Securities, in the same statement.

The New Jersey investigation of Siegel’s illegal practices began after the Financial Industry Regulatory Authority barred him from associating with any FINRA member in any capacity at the end of October 2016 due to his fraudulent dealings with the elderly couple. The FINRA ban followed Siegel’s failure to respond to a notice of suspension. Then, on Feb. 1, 2018, the New Jersey Bureau of Securities revoked Siegel’s registration as a broker-dealer agent in New Jersey, fining him $100,000, and referring the case to the state’s Division of Criminal Justice.