According to Investment News, former South Carolina broker, Claus Foerster has been indicted by a Grand Jury for defrauding clients. Foster is accused of soliciting clients to invest in a fictitious company, SG Investments.
While employed as a financial adviser at Smith Barney & Co., Morgan Keegan & Co. and Raymond James Financial Inc, Foerster allegedly instructed clients to move funds from their brokerage accounts into their personal checking accounts in order to cut Foerster a check for the phoney investment.
Investment News further reports that the grand jury alledged Foerster perpetrated his fraud over a 14-year-period beginning in 2000, sometimes providing clients with fraudulent earning statements. Foster is accused of pocketing $2.8 million.
The Financial Industry Regulatory Authority (FINRA) barred Foerster from working as a broker in 2014, after investigating allegations that he solicited clients to invest in a fictitious entity and converted their funds to his personal use. (Read more here).
Brokerage firms have a responsibility to adequately monitor the business transactions of their employees. When a FINRA registered representative solicits clients to invest in products not approved by brokerage firm where they are registered, the act can be considered “selling away.”
If proven, the brokerage firm may be liable for negligent supervision of their broker representative and held responsible for investment losses in a FINRA dispute resolution claim.
If you were a client of Claus Foerster and would like to discuss your litigation options to recover investment losses, please call the firm at 1-888-637-5510 for a free consultation.
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 Franklin, Tennessee. For more information on the firm, visit www.WhiteSecuritiesLaw.com.