John Greg Schmidt Reportedly Serving 5 years for Alleged Ponzi scheme.
The White Law Group is continuing to investigate potential securities fraud claims involving former Wells Fargo advisor John Greg Schmidt (Greg Schmidt).
According to public documents on FINRA’s website, a Financial Industry Regulatory Authority arbitration panel has ordered former Wells Fargo broker John Greg Schmidt to pay the firm $3 million in compensatory damages while he reportedly serves a 5 year prison sentence for securities fraud.
Schmidt was reportedly arrested on December 27, 2018 for an alleged Ponzi scheme that was perpetrated from 2003 to 2017 when he allegedly made 62 unauthorized sales and withdrawals from variable annuities held by customers, totaling over $927,000, purportedly transferring the funds without their knowledge by using fraudulent letters of authorization as well as allegedly issuing false account statements.
Schmidt reportedly generated $230,000 in commission from customers who were the source of or recipient of misappropriated funds, according to the charges. Many of Schmidt’s customers were elderly retirees with little financial experience, and some reportedly suffered from Alzheimer’s disease or other forms of dementia. At least five of Schmidt’s victims passed away during the course of his fraud, according to reports.
In June 2019, Schmidt received a five-year prison sentence after reportedly pleading “no contest” to more than 120 counts. In addition to the prison sentence, Schmidt was reportedly required to pay more than $34,000 in restitution and faces five years of probation on release.
According to the FINRA award posted on this week, Wells Fargo Advisors Financial Network filed a claim in August 2019, saying Schmidt misappropriated customer funds while he was with the company. The firm also accused him of breaching a license agreement.
Wells Fargo requested $3 million in compensatory damages; fees, costs and expenses and other relief. The FINRA panel, consisting of three people, ruled Schmidt was liable and must pay the firm $3 million in compensatory damages, but reportedly denied other relief.
Schmidt was registered with Wells Fargo Advisors Financial Network from 2006 until October 2017 when he was reportedly fired for the scheme. Prior to that, he worked for Stifel, Nicolaus & Company from 2002 to 2006, according to his FINRA BrokerCheck report.
According to reports, he was doing business as Schmidt Investment Strategies, where he was the only registered broker and conducted all the trades.
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The White Law Group continues to investigate potential securities fraud claims involving John Greg Schmidt and the liability his former employer, Wells Fargo may have for failing to properly supervise him.
Those investors that incurred losses investing with Schmidt may be able to recover those losses through the FINRA arbitration process.
Under FINRA rules and regulations, Broker-Dealers are responsible for supervising the actions of those advisors registered with their firm, and therefore may be held liable for the actions of their Broker(s).
If you suffered investment losses with John Greg Schmidt, the securities attorneys at The White Law Group may be able to help you. Please call 888-637-5510 for a free consultation, or visit us on the web at www.whitesecuritieslaw.com.
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.