The law offices of Gana Weinstein LLP are currently investigating claims that advisor Lester Burroughs (Burroughs) is converted customer funds among other allegations. According to BrokerCheck records, Burroughs is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm Lincoln Investment. In addition, Burroughs disclosed 17 customer complaints. If you have been a victim of Burroughs’ alleged misconduct our firm may be able to assist you in recovering funds.
According to news sources, Burroughs is facing up to 20 years in prison after pleading guilty to misappropriating $575,000 in client assets. Burroughs waived his right to be indicted and entered the plea in U.S. District Court of Connecticut as part of a deal in which he agreed to pay the full $575,000 in restitution to the victims of his crimes. It was alleged that Burroughs defrauded three clients in a Ponzi scheme from about 2012 to 2019. In addition, the U.S. Securities and Exchange Commission (SEC) announced separate civil charges against Burroughs stating that he misappropriated $560,000 after telling clients he would invest their money in guaranteed interest contracts with guaranteed returns of 4% or 7%. However, the SEC found that Burroughs instead used the money to pay his own expenses and the return funds to other clients.
Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.
However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Burroughs entered the securities industry in 1985. From September 2012 until December 2019 Burroughs was registered with Lincoln Investment out of the firm’s Torrington, Connecticut office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.