The US Securities and Exchange Commission has filed fraud charges against John Rogicki. The New York-based financial adviser, who is the chief compliance officer and managing director of Train, Babcock Advisors, LLC, is accused of defrauding a non-profit charitable foundation of $9M. The founder of the Foundation had named Rogicki, who had been her husband’s financial adviser, as the trustee and trust president in her will.
She and Rogicki became friends in the 1990’s when she was already an elderly woman. She died at 97 in 2001. Just a few years before that, it was Rogicki who introduced her to a trusts and estate attorney. This lawyer executed a trust and will that made all the designations to Rogicki.
Rogicki was also the non-profit’s investment adviser and he was tasked with making all investment decisions for the Foundation, including directing all securities transactions in the latter’s advisory account. The Commission believes that Rogicki committed the alleged fraud between 2004 and 2016.
He purportedly did this by liquidating securities positions in the charitable foundation’s advisory account and misappropriating proceeds by wiring himself the money from the brokerage account to the account of the founder’s estate, which he controlled. Rogicki then allegedly moved the funds to accounts that benefited him. The SEC said that Rogicki used the Foundation’s money that he had misappropriated to pay for his expensive lifestyle and assist his kids in buying real estate.
The SEC is accusing Rogicki of betraying the trust of the deceased, which goes against his legal duties as an investment adviser. In total, claims the regulator, he made over 200 fraudulent transactions of more than $9M in total. Now, the SEC wants disgorgement, prejudgment interest, a permanent injunction, and penalties.
The Manhattan District Attorney’s office has brought parallel criminal charges against Rogicki.
It was just last year that an ex-Train, Babcock Advisors financial representative was charged by prosecutors in New York for fraud in a different case. Brian Keenan pleaded guilty to stealing over $1.6M from three trusts’ beneficiaries. He used their funds on his own expenses.
Our institutional investor fraud lawyers represent nonprofits, charitable foundations, trusts, retirement plans, private foundations, and others in helping them recoup their investment losses. Contact The SSEK Partners Group today.
The SEC Complaint in the Rogicki Case (PDF)
Financial Adviser Pleads Guilty to Stealing $1.6 Million from Clients, The WealthAdvisor, December 12, 2016
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