SEC Said Firm Didn’t Implement Proper Safeguards To Prevent Misappropriation
The Securities and Exchange Commission (SEC) has fined Securities America Advisors $1.75M for allegedly not doing enough to protect customers from having their money stolen by a former registered representative who misappropriated $8M from at least 15 client accounts. Hector May has pleaded guilty to investment advisor fraud.
Securities America Advisors is the RIA arm of Securities America, Inc., which is owned by Advisor Group Holdings Inc.’s Securities America Financial Corporation. Securities America has been the introducing broker for Securities America Advisors customers.
The SEC contends that the firm’s analysts didn’t implement the necessary procedures and policies that would have protected clients and their assets from misappropriation even as there were numerous alerts warning of theft. Securities America is also accused of allowing for disbursements even when there weren’t the required signatures and failed to contact clients to confirm that they had instigated the disbursement requests. Securities America Advisors settled the Commission’s case without denying or admitting to the regulator’s findings.
Former New York Broker Ran Alleged Ponzi Scheme For Over Two Decades
Hector May, who was also president of Executive Compensation Planners, Inc., was a New York broker registered with Securities America from 1994 to 2018. In 2019, he was sentenced to 13 years in prison for defrauding customers in what prosecutors described as a multi-million dollar Ponzi scheme that went on for over twenty years. He also was told to pay $8.4M in restitution. May’s victims included older investors, his friends and relatives, as well as an employee pension plan.
Securities America fired the rogue broker in 2018. May’s BrokerCheck notes eight disclosures, including a 2018 customer dispute over the Ponzi scam that was settled for $3.95M and another investor fraud case that ended with a $406,510 settlement for the claimants.
The SEC said that administrative failures by Securities America enabled May to defraud its customers.
Experienced Securities Law Firm
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) works with investors nationwide in recovering the losses they have suffered due to the misconduct or negligence of brokers and their firms. If you suffered losses while working with ex-Securities America Advisors broker Hector May or another firm advisor, call our FINRA attorneys on (800) 259-9010 today.