The U.S. Securities and Exchange Commission (SEC) barred John T. Thornes, formerly the owner of Thornes & Associates in Redlands, California, from associating with financial professionals as part of an administrative order. He is accused of misappropriating $4.4 million from two brokerage accounts, The Shultz Trust Account and the Harbison Scholarship Trust account, on which he was the investment advisor to the trustee, and his mother, Doreen Thornes. Doreen Thornes set up the Harbison Trust to provide academic merit-based scholarships to up to 15 high school graduates from the money from the will of a family friend. She then asked John Thornes to manage it, and Thornes tried to take bigger risks with the fund, using margin loans and asking his mother to sign blank checks when more money was needed.
The Schulz Trust was established to care for Jeanne Schultz, a 77-year old Alzheimer’s patient, by her deceased husband. Allegedly, Thornes converted the trust to a margin account and conducted transactions that produced $49,000 in margin-interest charges and $11,400 in brokerage commissions for his firm. He then took $4.4 million from both accounts and transferred them to friends under the guise of loans that were never repaid. He and his friends then spent the money on vacation homes, cars, private jets and for gambling debts. This concluded in the client’s losing money and incurring unnecessary margin interest and brokerage fees. The scheme was conducted between 2010 and 2013.
If you invested money with John T. Thornes, you may be entitled to recover your investment losses by calling our securities law firm at 312-332-4200 and speaking with an attorney. The call is free with no obligation.
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