Senior Investor’s Loses Retirement Funds Because of Unsuitable Investment
An Arkansas retiree has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against LPL Financial for losses he suffered because of the unsuitable recommendation of Rhett Douglas Bedwell, one of the broker-dealer’s former registered representatives. Bedwell, who is no longer a stockbroker or investment advisor, is accused of defrauding a number of customers.
Now, this retiree is seeking up to $500K in investment loss damages after Bedwell invested a significant portion of his retirement funds in what appears to have been a Ponzi scam involving Small World Capital and the now defunct, Graysail Capital.
According to the Alabama Securities Commission, Small World appears to be some sort of Ponzi Scheme.
Our brokerage firm fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are representing this senior investor in his FINRA arbitration claim against LPL Financial. The claimant is alleging failure to supervise, misrepresentations and omissions, unauthorized transactions, broker fraud, negligence, and various breaches of duty.
Ex-LPL Broker Used Forged Documents to Invest Claimant’s Funds in Alleged Ponzi Scam
Rhett Bedwell worked 10 years in the industry. Before going to work for LPL Financial in 2017, he had been a broker at four other firms including Arvest Wealth Management, Investment Professionals, Inc., Wells Fargo Advisors, LLC, and Edward Jones.
This retiree had followed Bedwell from one brokerage firm to another. While at LPL, Bedwell recommended that the investor move his IRA to administrator/custodial firm, Equity Trust. He claimed this would be less expensive and that the funds would be placed in safe, low-risk investments.
However, Bedwell had also affiliated himself with Graysail Capital, an IRA which is now defunct but that was at Equity Trust. The ex-LPL Financial broker appears to then have used forged documents to invest more than $230K of the claimant’s retirement funds through Graysail into Small World. This was “selling away,” as this was an investment that the brokerage firm had not approved. All of that money has since disappeared.
It was LPL Financial’s duty to properly supervise Bedwell in his handling of this retiree’s funds.
LPL Financial Failed to Properly Supervise Bedwell
LPL Financial is one of the largest independent broker-dealers in the US. Rather than running branches where there is a manager that oversees its brokers, it has offices of supervisory jurisdiction. Its registered representatives are solo brokers who are responsible for covering the costs of setting up their own offices, many of which are located in strip malls or small office parks.
All LPL stockbrokers are considered firm employees and it is the broker-dealer’s duty to properly supervise these registered representatives. Unfortunately, its lack of direct oversight can make it hard for LPL Financial to keep tabs on its brokers’ activities.
The broker-dealer has been the subject of many failure to supervise claims over the years. SSEK Law Firm has helped a number of former LPL customers with such claims, which has enabled them to recover their losses.
Investors Lost Money in Graysail Capital
Graysail Capital has already been named in a number of FINRA arbitration claims involving other brokers. Its main role appeared to be lending money to Small World Capital, which allegedly belongs to someone named Mr. Smalls.
If you suffered losses because ex-LPL broker, Rhett Bedwell, or another stockbroker from a different firm transferred your funds to Graysail Capital or Small World Capital, contact SSEK Law Firm to request your free, no-obligation case consultation. We represent investors nationwide.