FINRA Suspends Nebraska Stockbroker Who Marketed An Alleged $300M Ponzi Scam to Customers
Troy Robert Baily, a former SagePoint Financial broker, has been suspended by the Financial Industry Regulatory Authority (FINRA) for six months. Baily, who is also a previously registered investment advisor, is based in Nebraska.
The suspension comes in the wake of allegations that Baily took part in unapproved and undisclosed private transactions and persuaded customers to invest in Future Income Payments (FIP), which federal prosecutors now say was a $300M Ponzi scam.
Shepherd Smith Edwards and Kantas (SSEK Law Firm) has been investigating investor claims involving ex-SagePoint Financial broker Troy Baily and other stockbrokers and investment advisors who marketed FIP to customers. Contact our investment fraud attorneys today so that we can help you explore your legal options.
Baily Sold $210K in Future Income Payments Investments to Customers
According to his BrokerCheck record, Troy Baily marketed and sold $210K in Future Income Payments to four investors, including three who were customers of the brokerage firm where he was a registered representative at the time. He made $8,900 from the sales.
However, not only did Baily fail to notify the broker-dealer that he was involved in FIP transactions, but also he never obtained their approval to promote this investment to customers.
Future Income Payments, LLC promoted itself as a structured cash flow investment. It claimed that it bought pensions from pensioners at a reduced rate and then sold part of the pensions to investors as a pension stream. Investors of FIP were promised 7-8% returns. Veterans, retirees, and other investors were among those harmed.
For example, retirees were offered lump-sum payments in return for a portion of their pension payments, usually over several years. FIP would then utilize these pension funds as cash flow that investors would buy. Not only were investors promised returns but also that they could expect to receive a monthly income for several years.
Last year, US prosecutors indicted FIP owner Scott Kohn for operating the alleged Ponzi fraud. Over 1000 investors may have been harmed. Meanwhile, stockbrokers, financial advisers, insurance agents, and others that sold customers on Future Income Payments were reportedly paid 6%-10% in commissions upfront.
Investor Filed $135K Structured Products Claim
Troy Baily has worked in the industry for 13 years. Last year, a customer filed a FINRA arbitration complaint naming him over the allegedly improper recommendation of structured cash flow products. The claimant is seeking $135K in damages.
Another customer dispute, from 2008, alleging unsuitable recommendations involving annuities was denied. The claimant had requested $250K in damages.
During his time in the industry, Baily has been a broker at several firms. Aside from SagePoint Financial where he worked from 2016 to 2018 (and before that in 2014), he also was previously registered with Axa Advisors, ProEquities Inc., Ameritas Investment Corp., Vision, Centaurus Financial, Next Financial Group, and Capital Brokerage Corporation.
Securities Fraud Attorneys Fighting For Investors
Brokerage firms can be held liable if one of their registered representatives caused customers to suffer huge investment losses due to broker fraud or negligence even if they were not aware of what the broker was doing at that time. Broker-dealers have a duty to properly supervise their financial representatives.
If you suffered investment losses in Future Income Payments while working with former SagePoint Financial broker Troy Baily or any other registered representative, SSEK Law Firm would like to offer you a free, no-obligation case consultation. We represent investors nationwide.