Three actions have been filed against a trio of Massachusetts investment advisers, accusing them of having defrauded investors resulting in the loss of millions. Though investment advisers are held to standards that are more strict than that of broker-dealers, investment attorneys would like to remind investors that they are by no means safe from fraud, as one can tell from the following examples.
John B. Wilson, an unregistered adviser, allegedly defrauded $1.5 million from 25 investors. Ninety percent of the funds, which were placed in JBW Capital LLC, were lost in only two trades made by Wilson within one month in 2008. Wilson admits to having a trading addiction; regulators want to ban him for life from the securities industry.
Daniel A. McKenna, a registered investment adviser, has been accused of defrauding clients of more than $1 million through the selling of worthless shares in Principle Profits Asset Management, as well as securing loans from investors who were never paid back. McKenna’s misconduct spanned 17 years.
Sean Michael O’Brien, a registered investment adviser, and Andover Equity Investment Group LLC have been accused of wrongfully using investors’ money to pay for personal expenses, as well as issuing investigators’ untrue statements and charging “exorbitant” fees. O’Brien’s management fee was a startling 15.54 percent, despite the fact that the average fee within the industry is .5-2 percent. Furthermore, O’Brien told state investigators that TD Ameritrade Holding Corp. never asked him about his fees when they had, in fact, done so and later terminated his ability to use the company’s platform.
In 2012, Massachusetts will be overseeing even more investment advisers when, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, investment advisers with assets between $25 million and $100 million will be overseen by state supervision, rather than federal.
If you suspect you have suffered losses as a result of your investment advisor’s extreme trades, exorbitant fees or any other type of investment fraud, you may have a valid securities arbitration claim. Contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.