FA-Mag.com reports that a former LPL broker has been order by a federal judge in Georgia to pay nearly $2 million in civil sanctions. Blake Richards was accused by the Securities and Exchange Commission (SEC) of operating a 4-year-long scam involving fictitious investments.
Several investors were allegedly elderly and entrusted Richards with their retirement. Richards, who ran his own brokerage office, purportedly persuaded clients to write checks, intended for securities products, directly to his business. He allegedly told clients that their funds would be invested in fixed-income assets, variable annuities and other securities, however, the money was reportedly never invested.
According to FA-Mag.com, LPL became aware of Richards questionable transactions when a colleague reported his alleged misconduct to the firm. As a result, LPL terminated Richards employment and notified securities regulators. The ruling against Roberts orders him to return $1.83 million to clients, including interest, and pay an $80,000 fine.
It is unclear if Roberts still has the money to repay investors. As such, The White Law Group is investigating the liability LPL Financial may have for Roberts actions.
Brokerage firms have a legal responsibility to adequately supervise the investment transactions of their registered representatives. When a representative, like Roberts, conducts business outside the scope of the firm, the act can be considered “selling away.” If a broker “sells away,” the brokerage firm may be liable for negligent supervision and responsible for investment losses.
If you suffered losses investing with Blake Richards and would like to speak to a securities attorney to discuss your litigation options, please call the securities attorneys 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, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on the firm, visit www.WhiteSecuritiesLaw.com.