A Long Island, N.Y.-based broker has agreed to settle the SEC's charges against him for defrauding a congregation of elderly nuns in Bronx, N.Y. The broker must now leave the securities business, disgorge $250,000 and pay a $100,000 penalty. The SEC claimed the broker churned two of the order's ostensibly low-risk accounts and charged excessive fees, consuming 10 percent of the accounts' value in a 13-month period. Without admitting or denying any of the SEC's allegations, the broker agreed to an order banishing him from the securities business and interacting with anyone in the business.
A New York financial advisor pled guilty in federal court to wire fraud in connection with unauthorized transactions made in a trust held for disabled children. According to state prosecutors, the advisor stole nearly $200,000 from an investment account held in trust by guardians of disabled children. The trust contained money from medical malpractice settlements. Although the funds were supposed to be invested only in U.S. Treasury bonds or New York municipal bonds, the advisor made unauthorized trades to receive higher commissions. The advisor generated fund losses between $400,000 and $1 million. As punishment, the advisor faces up to 63 months in prison and a substantial financial penalty.
