1. Avelar, et al. v. ING, Proequities, First
Heartland, Nevin Gillette, et al.: ING
financial advisor Nevin Gillette sold “Guaranteed
Investment Contracts” (GICs) to clients but in
reality the advisor was converting his clients’
funds for personal use see
here. The firm’s liability stemmed from its
failure to supervise Gillette.
2. Schmidt, et al. v. LPL: LPL
financial advisor Raymond Londo solicited purported
direct investments from clients but in reality Londo
stole the funds and spent it on gambling and
personal uses see
here. The firm’s liability derived from
failure to supervise claims.
3. May, et al v. Stifel Nicolaus and Regald
Smith: Stifel Nicolaus financial advisor
Regald Smith converted funds directly from clients
in fictitious bonds and other activity see
here. The firm was held responsible because
of its ignoring of multiple supervisory red flags
that should have alerted the firm of Smith’s
conduct.
4. Walker, et al. v. Wachovia Securities and
William Sirls: Wachovia financial advisor
William Sirls engaged in a direct investment ponzi
scheme where Sirls converted $40 million for
personal purposes, including gambling purposes. The
firm failed to reasonably supervise Sirls who was
engaging in extraordinarily aggressive trading in
his personal account at Wachovia with stolen client
funds.
5. Pingatore, et al. v. Madison Avenue,
Algird Norkus, et al.: Madison Avenue
financial advisor Algird Norkus sold bogus
promissory notes in a $10 million ponzi scheme. The
firm’s liability was derived from its failure to
identify and stop the ponzi scheme.
6. Shipman, et al. v. ING, Richard Wells, et
al.: ING financial advisor Richard Wells
sold “mutual bond trusts” but in reality was
operating a ponzi scheme. The firm’s liability
stemmed from supervisory lapses over an extended
period of time.
7. Bridges, et al. v. LPL and Ameriprise and
James Buchanan: LPL and Ameriprise
financial advisor Richard Buchanan sold $3 million
of bogus debentures in Clean Coal Tech Inc. The
funds were converted for the advisor’s personal use.
The firm failed to supervise Buchanan despite
multiple red flags that should have alerted the firm
to his scam.
8. Lovegren, et al. v. AG Edwards: AG
Edwards financial advisor Paul Lovegren sold bogus
“Bond Management” investments. In reality, he stole
his clients’ money. The firm failed to detect the
scheme despite multiple warning signs.
9. Knopp v. NEXT Financial: Next
Financial advisor Jeremy McGilvrey sold fictitious
income notes guaranteeing a 5% return. Instead the
funds were converted for the broker’s own use.
10. Norris, et al. v. Ameriprise: Ameriprise
financial advisor Don Overbey engaged in a direct
investment ponzi scheme. The funds were used for his
personal purposes. The firm ignored supervisory
warnings signs that should have alerted them of this
scheme.
