Fight Investment Fraud
Greco & Greco's lawyers represent investors to recover losses caused by securities fraud, churning, lack of suitability, negligence, sales of unregistered securities, unauthorized trading, and other misconduct by stock brokers, investment advisors, financial planners and their firms.
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Prudential Fined for Failure to Supervise Fraudulent Withdrawals From Variable Annuity
FINRA fined Prudential Annuities Distributors $950,000 this month for its failure to detect and prevent the theft by its agent, Travis Wetzel, of almost $1,300,000 from a customer's variable annuity. The FINRA Letter of Acceptance, Waiver, and Consent may be found here.
Mr. Wetzel, who was a former registered representative of LPL Financial, allegedly submitted multiple forged wire transfer requests from the variable annuity, to be paid to a third party account in Mr. Wetzel's wife's maiden name.
FINRA alleged that Prudential failed to investigate red flags and audits associated with the repeated payments to third parties. FINRA stated "PAD failed to establish and maintain reasonable supervisory procedures and controls to supervise third-party distributions and prevent fraudulent withdrawals from VA accounts."
Although the FINRA press release states that the victim was repaid her losses, brokerage firms do not always voluntarily do so in broker theft cases. Greco & Greco has extensive experience in broker theft and forged withdrawal/wire cases. Although the individual thief may not have the funds to return the stolen monies, the associated firms required to supervise the activities of their agents may be found responsible under multiple legal theories. If you are the victim of a fraudulent theft, wire, or withdrawal, please contact Scott Greco for a free attorney consultation about your case.
GUILTY PLEA IN FRAUDULENT INVESTMENT SCHEME
Michael Crosswhite of Forest, Virginia pled guilty this week to wire fraud and money laundering in U.S. District Court for the Western District of Virginia. The Information filed in Court alleged that he engaged in a wire transfer of $113,805 from a victim’s Allianz account to a bank account Crosswhite controlled, and that he transferred $103,079 by wire from another victim’s Allianz account to a TD Ameritrade account. According to this Lynchburg News & Advance article, the U.S. Attorney’s Office stated that “Crosswhite was working from his home as a financial consultant under the umbrella of Allianz Life Insurance Company of North America.” The article further stated that Crosswhite admitted “he liquidated the investment accounts of several victims without their knowledge, eventually using funds himself, losing them in questionable investments or floating them back and forth to pay off victims? accounts.” This activity describes a classic Ponzi Scheme where monies from recent victims are used to pay past victims to keep the scheme hidden.
According to the State of Virginia’s Bureau of Insurance website, Crosswhite was registered to sell insurance (Life, Annuities, Health, and Variable Contracts) until September 1, 2011. He further is listed in FINRA’s Brokercheck as being a registered securities representative for Metlife Securities until December, 2009.
If you are a victim of a ponzi scheme, or have otherwise had your trusted investment representative transfer your monies without your knowledge, please contact Greco & Greco for a free consultation with one of our attorneys.
Posted by W. Scott Greco on 06/15/12.
Brokerage Firms • Allianz • Metlife Securities • FINRA • Insurance • Ponzi Scheme • Securities Fraud • State Regulators • Virginia • Unauthorized Trading • Variable Annuities • Permalink
Securities Fraud Guilty Plea for IPOF Fund Manager
A fund manager who had utilized Ferris Baker Watts accounts for his IPOF fund plead guilty in Cleveland, Ohio to securities fraud related to stock price manipulation. According to this Baltimore Sun article, David A. Dadante lost $28 million dollars of investors? monies in a scheme that started as a ponzi scheme and led to at least four different illegal trading techniques to artificially increase the price of a specific stock, Innotrac.
The Baltimore Sun has extensively covered the involvement of Ferris Baker Watts in this matter in these linked articles, which discuss the early retirement of several executives since the investigation began, a 2003 company memo regarding concerns, and internal flags of potential problems in Dadante?s accounts.
Stephen J. Glantz, a former Ferris broker, has recently been charged with related securities fraud by federal prosecutors in Cleveland. According to this Baltimore Sun article, the Ferris broker is charged with engaging in unauthorized trading in his clients’ account to aid Dadante’s scheme.
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