1. Avelar, et al. v. ING, Proequities, First Heartland, Nevin Gillette, et al.: ING financial advisor Nevin Gillette sold “Guaranteed Investment Contracts” (GICs) to clients but in reality the advisor was converting his clients’ funds for personal use see here. The firm’s liability stemmed from its failure to supervise Gillette.
2. Schmidt, et al. v. LPL: LPL financial advisor Raymond Londo solicited purported direct investments from clients but in reality Londo stole the funds and spent it on gambling and personal uses see here. The firm’s liability derived from failure to supervise claims.
3. May, et al v. Stifel Nicolaus and Regald Smith: Stifel Nicolaus financial advisor Regald Smith converted funds directly from clients in fictitious bonds and other activity see here. The firm was held responsible because of its ignoring of multiple supervisory red flags that should have alerted the firm of Smith’s conduct.
4. Walker, et al. v. Wachovia Securities and William Sirls: Wachovia financial advisor William Sirls engaged in a direct investment ponzi scheme where Sirls converted $40 million for personal purposes, including gambling purposes. The firm failed to reasonably supervise Sirls who was engaging in extraordinarily aggressive trading in his personal account at Wachovia with stolen client funds.
5. Pingatore, et al. v. Madison Avenue, Algird Norkus, et al.: Madison Avenue financial advisor Algird Norkus sold bogus promissory notes in a $10 million ponzi scheme. The firm’s liability was derived from its failure to identify and stop the ponzi scheme.
6. Shipman, et al. v. ING, Richard Wells, et al.: ING financial advisor Richard Wells sold “mutual bond trusts” but in reality was operating a ponzi scheme. The firm’s liability stemmed from supervisory lapses over an extended period of time.
7. Bridges, et al. v. LPL and Ameriprise and James Buchanan: LPL and Ameriprise financial advisor Richard Buchanan sold $3 million of bogus debentures in Clean Coal Tech Inc. The funds were converted for the advisor’s personal use. The firm failed to supervise Buchanan despite multiple red flags that should have alerted the firm to his scam.
8. Lovegren, et al. v. AG Edwards: AG Edwards financial advisor Paul Lovegren sold bogus “Bond Management” investments. In reality, he stole his clients’ money. The firm failed to detect the scheme despite multiple warning signs.
9. Knopp v. NEXT Financial: Next Financial advisor Jeremy McGilvrey sold fictitious income notes guaranteeing a 5% return. Instead the funds were converted for the broker’s own use.
10. Norris, et al. v. Ameriprise: Ameriprise financial advisor Don Overbey engaged in a direct investment ponzi scheme. The funds were used for his personal purposes. The firm ignored supervisory warnings signs that should have alerted them of this scheme.
