The Financial Industry Regulatory Authority has permanently barred a former Stifel, Nicolaus & Co., Inc. and AXA Advisors broker from the securities industry. Kenneth George Neely, who worked in Stifel Nicolaus’ St. Peters, Missouri office and AXA Advisors’ Clayton, Missouri office, has admitted to running a ponzi scheme involving clients of both broker-dealers (Stifel Nicolaus and AXA Advisors), as well as friends, family members, and fellow church members.
According to federal regulators, Neely acted fraudulently when he induced at least 25 clients to take part in the “St. Louis Investment Club” and invest in “St Charles REIT.” Both the investment club and the real estate investment trust were bogus.
To cover up the Ponzi scheme, Neely had investors issue payments to his wife in $2,000 and $3,000 increments so that banks wouldn’t get suspicious when funds were turned into cash. He also created fraudulent invoices that looked like official ownership certificates for REIT purchases. These certificates listed names of a “President” and a “Secretary” who were both fictitious. Neely promised investors that their investments would be taken care of.
For example, he promised one friend a high return rate on a St. Charles REIT investment. The friend had invested $154,000. Neely would end up returning $10,000 to this person and using the rest of the funds to pay for some of his own personal expenses and debt.
He also persuaded a fellow church member to invest $35,000. He promised a 5% return rate. Small interest payments later dried up and Neely used the balance for his personal spending.
Neely improperly utilized over $600,000 of his investors’ assets. He converted over half the amount to his own use and returned about $300,000 to some investors.
It wasn’t until FINRA spoke with the St. Louis broker about his bogus real estate investment trust that he stopped collecting funds. AXA terminated his employment after he admitted what he’d done to FINRA.
FINRA enforcement chief Susan Merrill says that it is disturbing that in addition to taking advantage of clients at the brokerage firms where he’d worked, Neely also exploited relatives, friends, and acquaintances and took their “hard-earned savings.” Neely has already been named in at least four customer disputes.
If you have questions about investments you made with Neely, AXA Advisors, or Stifel Nicolaus, or if you believe that you have been the victim of a securities fraud, The White Law Group may be able to help. To speak to a securities attorney, please call our Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
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