How do Brokers and Advisors Steal? Let me count the ways!

One would think that brokers and advisors, some of whom work for the largest financial institutions, could be trusted to, at least, not outright steal your money or securities from your account. But it is usually those who you confide in the most that have the greatest opportunity to break that trust. After all they collect and hold your assets and personal identity information. They generally know the most about your finances at the brokerage firm and elsewhere.

This criminal behavior does not happen often, but when it does, it is usually by a desperate broker or advisor plagued with gambling debts, drug habit and/or a lifestyle he or she cannot afford to pay for without stealing from clients.  But this article is not about why they do it; rather, it is about how they steal your assets or help someone else access your life savings; and how you recover the loss of funds and/or securities.

Theft and forgery go hand-in-hand when it comes to stealing money or securities from clients by brokers and advisors. With the advent of desktop computers and color printers, it has become relatively easy for brokers to reproduce official-looking account statements and photo-shop to alter other account records to perpetrate and cover up the crime. For example, some brokers have been known to transfer assets to other accounts through forged letters of authorization for wire transfer payments to their accounts or credit card companies to pay off their personal debts. The advisors then re-route the real account statements to a post office box or fictitious address and send forged account statements, confirms and other official-looking documents to their clients that reflect fictitious positions and money balances. This scheme enables brokers to lead the client to believe that his/her investment strategy is working and that he or she has nothing to be concerned about when the broker has actually withdrawn a client’s funds from the account.

Not all broker and advisor thefts have been so elaborate.  Depending on the client, some have been as simple as asking the client for a loan that is never paid back; asking a client to invest in a fictitious company through a so-called private securities transaction; or collecting funds from a client or group of clients to pool their funds to invest in a fictitious account the broker or advisor is supposedly going to manage. Investments in promissory notes that the broker never intends to repay or repays by means of a Ponzi scheme (a scheme where one investor’s funds is used to repay the other investor) seem to be the most prevalent form of theft today. A close second is Elder Abuse and stealing from clients suffering from dementia, a crime for which the broker or advisor deserves severe punishment.

Generally, brokerage firms are vicariously (automatically) liable for all of their employees’ bad acts and omissions, including thefts from accounts. This is especially true when it comes to actual clients who had assets stolen from their accounts at the brokerage firms. But sometimes brokers and advisors use their credentials to steal from individuals who are not clients, and this is where an attorney’s knowledge and experience in recovering investors’ losses is paramount to the success of your case. 

Unfortunately, the advisor has usually spent the money and your only recourse is against his or her employer for failure to supervise its employee. What were the red flags to the employer? How close did the firm monitor the broker and his lifestyle? Did the firm even have a supervisory system in place to detect these elaborate schemes?

$21,000,000 Final Judgment for Civil Theft
$7,800,000 Stockbroker Option Fraud Settlement
$6,000,000 Stockbroker Bond & Bond Fund Fraud Settlement
$5,800,000 Arbitration Award for Stockbroker Fraud
$4,300,000 Class Action Ponzi Scheme Settlement
$3,500,000 Corporate Trustee Mismanagement Settlement
$3,350,000 Stockbroker Bond & Bond Fund Fraud Settlement
$3,200,000 Arbitration Award for Mortgage-Backed Securities Fraud
$2,700,000 Arbitration Award for Stockbroker Negligence & Aiding Theft
$2,500,000 Stockbroker Bond & Bond Fund Fraud Settlement
OVER $125 MILLION RECOVERED FOR CLIENTS Contact Our Lawyers for Nationwide Help

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    No half efforts here. He and his group of professionals are outstanding strategists that can execute with precise fervor and unyielding determination. Theirs is a huge wave of facts, research, precedents and preparation, that has impressed me in its thoroughness and creativity, and most importantly with the results. No stone goes unturned and no effort is ever spared. In my book, he and they are those of a very rare kind that one wants to keep for a very long time.

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    Just like the song from HAMILTON, it's so nice to have Bob Pearce on your side. He is the consumate plaintiff's lawyer: smart. dedicated, fully able to try a case but a great negotiator in a mediation. He did a wonderful job for us, fully supporting us through the process and more than holding his own against a large national law firm.

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    This law firm is the real deal. We were so lucky that they took our case as they have so much experience in securities and all the wrongdoing that happens in these investment companies where they mislead you and your money (as in our case) into schemes that are not what you think they are. Mr. Robert Pearce is one of the best lawyers around, a truly professional who will fight for you and will tell you as it is all the time. We could not have gone thru this experience if it was not for all the advice, guidance and support he and all of his staff and associates brought to the game. For the best fighting chance, Robert Pearce is the lawyer you want in your corner.

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    Attorney Robert Pearce was our lawyer in a case against a Brokerage Firm and I'm witness to his ability and intelligence to deal with lawyers from the most prominent law firm in New York which was the key to recovering much of our losses cheered by their negligence. He never felt intimidated and his study of the case and perseverance prevailed at all times.

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  • "In the end, Bob and I had the last laugh when the arbitrators awarded me almost 6 million dollars."

    No lawyer except Bob said I had a chance of winning. When UBS Lawyers laughingly offered me zero to settle the dispute, Bob became even more determined to prove everybody wrong. Bob was extremely prepared, and always a step ahead of the opposing attorneys throughout the arbitration. In the end, Bob and I had the last laugh when the arbitrators awarded me almost 6 million dollars.

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FREE INITIAL CONSULTATION WITH ATTORNEYS WHO ARE THE REAL DEAL

Attorney Pearce has worked these types of cases for over 40 years and has experience with many elaborate schemes brokers have used, or helped others use, to steal your money. If you are the victim of outright theft or another form of misappropriation, call us locally at 561-338-0037, toll-free at 1-800-732-2889 or contact us online to arrange you free consultation.