On April 12, 2016, former LPL Financial LLC (“LPL”) broker Charles C. Fackrell (CRD# 5369665) appeared before U.S. Magistrate Judge David Cayer in order to plead guilty to one count of securities fraud for operating a $1.4 million Ponzi scheme. Based on documents filed with the federal court for the Western District of North Carolina, beginning around May 2012, Mr. Fackrell perpetrated a Ponzi scheme by misappropriating investor funds solicited from at least 20 victims in Wilke County, NC, and elsewhere. According to court documents, Mr. Fackrell abused his position of trust with his clients, steering them away from legitimate investments to purported investments with “Robin Hood, LLC,” “Robinhood LLC,” Robin Hood Holdings, LLC,” and “Robinhood Holdings, LLC,” as well as related entities (collectively, “Robin Hood”). These entities allegedly were controlled by Mr. Fackrell and provided him with a conduit through which to cover his own personal expenses, including hotel expenses, groceries, purchases at various retail shops, and to make large cash withdrawals.
Court records indicate that Mr. Fackrell successfully solicited victimized investors by making false and fraudulent representations, including that the investors’ money would be invested in, or secured by, gold and other precious metals. Further, Mr. Fackrell allegedly told investors that Robin Hood was a safe investment, paying annualized guaranteed returns of 5-7%. In actuality, however, Mr. Fackrell allegedly spent only a fraction of the investor money on such assets. Contrary to the representations made to investors, Mr. Fackrell allegedly used a great deal of the money to cover personal expenses, in addition to diverting approximately $700,000 of his victims’ money, back to other investors in classic Ponzi-style payments designed to continue the fraudulent scheme.
Mr. Fackrell entered the securities industry in 2007, when he was under the employ of Morgan Stanley. From 2010-2014, Mr. Fackrell was employed by LPL in Yadkinville, NC. Currently, FINRA BrokerCheck indicates that Mr. Fackrell has been the subject of several customer complaints, including the following four pending complaints:
- Customer Dispute – 8/21/2015 – the Claimants have alleged unsuitable investments and misrepresentations, as well as alleging that the financial advisor placed them in investments unapproved by LPL;
- Customer Dispute – 2/16/2016 – the Claimants have alleged selling away, forgery, unsuitability, and misrepresentation;
- Customer Dispute – 3/24/2016 – the Claimants have alleged selling away, unsuitability, and misrepresentation;
- Customer Dispute – 11/21/2016 – the Claimants have alleged selling away, forgery, unsuitability, and misrepresentation.
Mr. Fackrell was discharged from his employment with LPL in December 2014. Thereafter, in February 2015, Mr. Fackrell, without admitting or denying the findings, consented to sanctions by FINRA, including his being barred from the securities industry based on “findings that… Fackrell converted customer’s funds and sold private securities offerings away from his member firm without the firm’s knowledge or approval.”
Broker-dealers such as LPL are charged with the responsibility to adequately supervise all representatives who are registered through their firm. This supervision includes monitoring the investments sold by their registered representatives. Further, broker-dealers must take steps in order to ensure that their financial advisors follow all applicable securities rules and regulations, as well as internal firm policies. When broker-dealers fail to adequately supervise their registered representatives, this may give rise to liability for investment losses sustained by customers.
The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in recovering funds on behalf of investors who have lost money due to financial frauds, including Ponzi schemes. Investors may contact our office at (866) 966-9598 or firstname.lastname@example.org for a no-cost, confidential consultation.