Former broker Claude D. McDougal was sentenced to 78 months in prison for operating a Ponzi schie that duped investor more that $3.5 million. In addition, McDougal was ordered to pay $2,020,078.26 in restitution to his victims.
According to a press release from the US Attorney’s Office Western district of North Carolina court documents state that from 2006 to 2010 McDougal told more than 25 investors in Charlotte and elsewhere that he would invest their money in promissory notes offered by US Financial Alliance Consultants, LLC. McDougal Created Financial Alliance in 2005 which was never registered as dealer of securities in North Carolina. Court documents report that many of his victims were elderly and invested their life saving with him.
During the three year scheme, according to court records, McDougal only invested $580,000 of the $2.5 million he collected from investors. He used approximately $450,000 to make payments to some of the victims and used nearly $1.9 million to support his lifestyle.
According to BrokerCheck, during the relevant time, McDougal was an employee of the brokerage firm Centaurus Financial, working there from 11/2006 – 08/2009.
Brokerage firms have a responsibility to effectively monitor the business activity of their employes. When brokers solicit investors to buy securities not authorized by the firm, the act can be considered “selling away.” If a broker is proven of “selling away,” the brokerage firm may still be liable for negligent supervision and responsible for investment losses.
If you were a client of Claude McDougal and would like to discuss your potential to recover your losses, please call the securities attorney of The White Law Group at (312) 238-9650 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
To learn more about The White Law Group, visit www.WhiteSecuritesLaw.com.