Investment fraud lawyers are currently investigating claims on behalf of individuals who invested with Stephen B. Blankenship and were, as a result of Blankenship’s actions, victims of securities fraud. A recent announcement by the Securities and Exchange Commission stated that it has charged Blankenship and his company with stealing from customers. These customers, who were persuaded by Blankenship to make withdrawals from their brokerage accounts to invest directly with him, lost at least $600,000 to his fraud. The accounts from which they withdrew these funds were managed by Blankenship but were held at other firms.
According to the SEC’s allegations, Blankenship lured customers in with assurances of greater rates of return if they would transfer their money to Deer Hill Financial Group, Blankenship’s firm. Furthermore, he claimed to be investing in publicly-traded mutual funds and other established securities but, instead, made no such investments and transferred his customer’s money to his personal bank account. The money was then allegedly used to pay various personal expenses, including travel, grocery bills and mortgage payments.
“Blankenship took advantage of fellow churchgoers and senior citizens who relied on their savings for retirement and placed their trust in him,” says David P. Bergers, director of the SEC’s Boston Regional Office. “He betrayed that trust by using their money to make personal credit card payments and home improvements.”
According to investment fraud lawyers, it is not uncommon for investors to feel safe when they have an established relationship with a broker or adviser, but many fraudsters will deliberately use this trust in order to commit fraud. The SEC’s complaint states that some of the defrauded customers had been loyal customers of Blankenship for two decades. Nevertheless, he began defrauding these customers since at least 2002. The SEC stated that, “most of the investors lied to by Blankenship were brokerage customers of his, first at Syndicated Capital Inc., a registered broker-dealer based in Santa Monica, California and then at Vanderbilt Securities LLC, a registered broker-dealer based in Melville, New York.”
Blankenship was registered with Syndicated Capital from March 2002 until May 2006. Following that period he was registered with Vanderbilt Securities from May 2006 until November 2011. Securities fraud attorneys say that at the time Blankenship was registered with these firms, the firms were responsible for properly supervising Blankenship’s activities and, as a result, these firms could be held liable for investor losses.
If you suffered significant losses as a result of your investments with Stephen B. Blankenship, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities fraud attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.