Aaron J. Johnson, a former registered investment adviser who ran Capital Advisors until state regulators took back his firm’s registration in 2013, is sentenced to five years behind bars for financial fraud. Johnson, 37, claimed that he stole over $600K from clients because he suffered a mental health breakdown.
According to prosecutors, Johnson took money from middle-class clients’ retirement accounts and charged them excessive fees to the point that he’d practically drained their funds. After Capital Advisors lost its registration, Johnson became affiliated with Trade PMR, a Florida-based firm that offers custody and brokerage services for investment advisers that are registered. Prosecutors contend that even then Johnson kept stealing from clients despite the fact that he was now under investigation. Prosecutors said that after Trade PMR began to question the fees that Johnson charged clients, including $3200 in client fees for an account that only held $13K in assets, the ex-adviser generated fraudulent documents as proof that his actions were warranted. He drained the account of the client, who was a single mom with three kids, until there was only $5 left.
Johnson has been ordered to pay back everyone that he defrauded.
FINRA Orders Broker to Repay Investor For Excessive Trading in His Account
In another, unrelated securities case, A Financial Industry Arbitration panel has decided that former broker Anthony Mastroianni Jr. must pay back ex-client Roy N. Gruenburg $540K in damages because he allegedly engaged in excessive trading in his account. Gruenburg had initially asked for $2M but consented to lower the amount that Mastroianni would have to pay him according to what he gets back in a private settlement with Alexander Capital, which is the firm that the ex-broker worked for during the alleged wrongful trading. Mastroianni was previously with JP Turner, too.
If you are an investor who has sustained losses due to securities fraud by a broker or an investment adviser, you may be able to recover your lost investments. The best way to increase your chances of recovery is to work with an experienced broker fraud law firm. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.
Advisor Sentenced To 5 Years In $620,000 Skimming Scheme, Financial Advisor, August 29, 2017
Finra panel says barred broker must pay $540,000 in damages, InvestmentNews, August 30, 2017