Former broker, Malcolm Segal, has finally settled charges with the Securities and Exchange Commission that he allegedly ran a ponzi scheme stealing millions from investors.
According to FA-Mag, Segal’s criminal indictment alleged that between January 2011 and May 2015 Segal formed a company, National CD sales, and purported to buy and sell CDs on behalf of clients.
Allegedly Segal told investors that they could earn an annual interest rate of up to 12% investing in CDs, but instead he used investors funds to pay personal expenses and to make purported interest payments to investors. Segal is accused of stealing more than $3.2 million from clients and other investors.
In addition, FA-Mag reports that the SEC accused Segal of selling investments from his brokerage customers’ accounts to fund his scheme when it became more difficult to make interest payments.
Segal was employed at Cumberland Brokerage Corp. and then Aegis Capital Corp during the course of his alleged scheme.
In February, Segal pled guilty to eleven counts of mail fraud and three counts of wire fraud before the United States District Court for the Eastern District of Pennsylvania. Back in February 2015, the Financial Industry Regulatory Authority (FINRA) barred Segal from working as a broker (read more here).
The White Law Group continues to investigate the liability that the brokerage firms that employed Segal may have for his actions. Brokerage firms have a responsibility to monitor the conduct of their employees and implement the necessary safeguards to detect fraud. When a broker deceives and steals from clients, the brokerage firm may be liable for negligent supervision and responsible for investment losses.
When investors are duped by greedy and unscrupulous financial professionals, the brokerage firms that employs such individuals may be held liable for the losses.
If you suffered losses investing with Malcolm Segal and would like to discuss your litigation options, please call the securities attorneys of The White Law Group 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. The firm represents investors in FINRA arbitration claims throughout the country. For more information on the firm, visit www.whitesecuritieslaw.com.