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Regulation and Compliance > Federal Regulation > SEC

Barred Broker Took Money From Veteran: SEC

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The Securities and Exchange Commission has charged an advisor who was recently barred from the industry with defrauding two senior citizens, including a World War II-era veteran, out of nearly $1 million.

According to the complaint, Frederick Stow  who was in the industry from 1978 to 2019   acted as the veteran’s registered representative for over 30 years and “inserted himself over time into the veteran’s personal and financial affairs.”

The now ex-advisor started in the business at Merrill Lynch and then moved to SunTrust, Northwestern Mutual, Robert Baird, Wells Fargo and Raymond James & Associates, which fired him a year ago for misappropriating funds from client accounts.

Details of the Complaint

The SEC complaint alleges that in October 2015, Nashville-based Stow began making unauthorized sales of securities from the veteran’s individual retirement account. Stow then transferred the proceeds of those sales to his own bank account 74 times using falsified wire transfer forms.

The complaint further states that about a month after the 98-year-old veteran died last year, Stow stole money from another senior citizen by wiring money from that individual’s brokerage account to Stow’s without authorization. In total, Stow stole $933,500 from the two seniors, according to the SEC.

“Far too often, veterans and seniors who depend on their investments for retirement income are targeted by fraudulent schemes,” according to Justin Jeffries, associate regional director for the SEC’s Atlanta Regional Office.

“As alleged in our complaint, Stow took advantage of these seniors, abusing his access to their brokerage accounts to generate income for himself,” Jeffries added.

The SEC has charged Stow in the U.S. District Court for the Middle District of Tennessee with violations of the antifraud provisions of the federal securities laws.

The regulatory body is seeking injunctive relief, the return of allegedly ill-gotten gains plus prejudgment interest and a civil penalty. Separately, the U.S. Attorney’s Office for the Middle District of Tennessee filed criminal charges against Stow.


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