News: FINRA Files Complaint Against Ex-broker

On February 9, 2012, ex-broker James Scott McKee was charged with aggravated theft in the first degree. As a result of his broker misconduct, McKee faces four charges of theft. In addition, a complaint has been filed against him with the Financial Industry Regulatory Authority (FINRA). McKee was formally affiliated with LPL Financial LLC, Morgan Stanley Smith Barney LLC and Berthel Fischer & Co. Financial Services Inc. According to the complaint filed with FINRA, McKee’s victims included a local church, an 81-year-old retiree and other unsophisticated investors.

McKee convinced an LPL client to invest $400,000. This investment took place in April 2007 and was put into a real estate venture. However, according to the FINRA complaint, McKee failed to notify or receive approval from LPL for the venture. Following a heart attack, which subjected the investor to significant medical expenses, she contacted McKee to have her money returned. McKee received two checks for $200,000 in February 2008 but failed to return the money to the investor. Instead, he told the client the funds remained invested and then used them for his own use. The money has not yet been returned to the client.

According to the police statement on the matter, McKee “committed aggravated theft by deception and fraud with respect to securities or securities business” from February 2008 to the present. According to Oregon officials, McKee sold unregistered securities, conducted unauthorized liquidation of investment account monies, concealed the liquidation and made an unauthorized deposit of said funds into his personal bank account.

According to the FINRA complaint, McKee used material misrepresentations and omissions to persuade investors to make investments in multiple undisclosed real estate ventures in which he had a direct or indirect financial interest. He is also accused of lying about how the invested funds would be used, improperly using customer funds for personal benefit and making unsuitable recommendations.

From November 2002 until September 2008, McKee was affiliated with LPL. Immediately following and until November 2010, he was associated with Berthel Fisher. At that point he joined Morgan Stanley until he was discharged in October.

If you believe you have been the victim of broker misconduct similar to McKee’s, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.