Articles Tagged with investment theft

shutterstock_184920014-300x199Our firm is investigating claims made by Stifel, Nicolaus & Company, Incorporated (Stifel Nicolaus) when the firm terminated broker Jon Schmidhammer (Schmidhammer).  According to the firm, Schmidhammer was discharged in July 2016 after allegation were made that Schmidhammer resigned after his arrest for allegedly stealing money from a client.

According to Schmidhammer’s brokercheck records Schmidhammer has no disclosed outside business activities.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

In October 2016 a customer filed a complaint alleging that Schmidhammer engaged in unsuitable management of their accounts, unauthorized trading, breach of fiduciary duty, and conversion.  The complaint alleges damages of $500,000.  The claim is currently pending.

shutterstock_180342155According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Roderick Yzaguirre (Yzaguirre) has been the subject of at least 10 customer complaints and one firm termination. Customers have filed complaints against Yzaguirre alleging that the broker made misrepresentations concerning investments and misappropriated their funds among other claims. To date investors have accused Yzaguirre of misappropriating approximately $3,000,000 in client funds with the true extent of Yzaguirre alleged misconduct still unknown.

Yzaguirre has been a FINRA broker since 1994. From October 2009, through April 2015, Yzaguirre has been associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) out of their Ontario, California branch. Merrill Lynch accused Yzaguirre of conduct involving potential misappropriation of client funds and misrepresentations of securities at the time of his termination from the firm.

Under the FINRA rules, a brokerage firm owes a duty to properly monitor and supervise its employees in order to detect and prevent brokers from engaging in illegal investments activity.  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. Investment schemes often occur 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.

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