FINRA Suspends Broker For Accepting $105K in Gifts
The Financial Industry Regulatory Authority Inc. has suspended Adam C. Smith from the securities industry for a year. The former Merrill Lynch broker, who was fired from the firm, will pay a $10K fine.
According to the self-regulatory organization, while at Merrill Lynch, Smith and his wife accepted $26K in checks from a couple whom he represented. The money was to help fund the education of Smith’s children. When one of the client’s passed away, the remaining spouse gifted Smith and his wife another $53K, again to pay for their kids’ education. Smith received $26K from other clients.
Although he is settling, Smith is not denying or admitting to FINRA’s findings.
Ex-BB & T Broker is Accused of Selling Pot-Equipment Stocks Without Firm Authorization
Mark Schklar will pay a $10K fine and serve an eight-month suspension from the securities industry for selling private securities to a BB & T (BBT) customer without getting authorization from his then-firm. Brokers are prohibited from recommending or selling securities that their firms have not reviewed and approved for sale to their clients. Doing so without the firm’s permission, as Schklar is accused of, is referred to as “selling away.” In Schklar’s case, he was accused of recommending and helping to execute the sale of 8 million shares to four investors in a company that made equipment for growing marijuana.
Schklar did not admit to or deny FINRA’s findings when settling.
Louisiana Investment Adviser Pleads Guilty to Fraud Charges
In Louisiana, Bryan Lee Addington has pleaded guilty to aggravated identify theft and mail fraud over an investment adviser scam in which he fraudulently obtained somewhere from $1.5M to $9.5M from victims. The amount that he took from investors is still under determination.
As part of his plea agreement, Addington admitted to soliciting money from clients, did not invest their money, and sent bogus account statements from post office boxes that did not exist to investors.
Addington paid investors distributions that came from the money of other investors.
Securities Fraud Conviction is Tied to Municipal Bond Issuances
Aaron Troodler has pleaded guilty to securities fraud. According to former-US Attorney for the Southern District of New York Preet Bharara, Troodler and his supervisor misled investors over municipal bonds, defrauding Ramapo, NY citizens and thousands of other investors when he helped sell more than $150M of municipal bonds involving “fabricated financials.” Troodler was a former Ramapo Local Development Corp. official.
According to US attorneys, Troodler and his former supervisor lied to investors to hide the city’s financial woes, as well as the Ramapo Local Development Corp’s inability to pay bondholders principal and interest as scheduled.
Bharara’s office believed that this was the first municipal bond-related criminal securities fraud prosecution that has led to a conviction. Troodler is also facing Securities and Exchange Commission charges.
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Fired Merrill broker took client money for kids’ schooling: Finra, InvestmentNews, March 8, 2017
Former BB&T broker suspended for secretly selling shares in pot-equipment maker, Bank Investment Consultant, March 14, 2017
Ex-investment adviser pleads guilty to defrauding clients, The Wichita Eagle, March 8, 2017