by Brian Mahany
Citicorp Global Markets was fined $500,000 by the Financial Industry Regulatory Authority (FINRA) for failure to supervise a stockbroker who stole hundreds of thousands of dollars from clients many of whom were elderly or infirm. According to regulators, one of the victims was her own father!
Brokerage firms are responsible for supervising their employees including traders and stockbrokers. Today’s headlines about a UBS “rogue” trader that allegedly defrauded the Swiss banking of $2 billion is a prime example of what happens when brokers are not properly supervised. In the UBS case, the bank is the victim. In the case of Citicorp, elderly clients were the victims.
FINRA says that Tamara Moon, a sales assistant in their Palo Alto, California office, defrauded clients over an 8 year period. During that time she supposedly stole $749,000 from 22 customers. That the crime went on for years without being detected by Citicorp’s managers and compliance department speaks volumes as to the apparent ease in which brokers can mismanage clients’ investments.
Regulators say that Moon “targeted elderly, ill or otherwise vulnerable customers whom she believed were unable to monitor their accounts.” Her victims included elderly widows, a senior citizen with Parkinson’s disease and her father.
This case is important because it illustrates how broker dealers can be held responsible for the actions of their employees. FINRA says that in one instance, Citicorp allowed Moon to transfer money from a deceased person’s account which ultimately was transferred into her own account. This was after Citicorp was notified the customer was dead.
Brad Bennett, FINRA’s Chief of Enforcement said, “Tamara Moon used her knowledge of Citigroup’s lax supervisory practices at the branch to take advantage of some of the firm’s most vulnerable customers, including the elderly. Citigroup had reason to know what she was doing and could have stopped her.”
Not every case of broker misconduct is a blatant as this one. Most crooked brokers are not so bold as to simply transfer your money into their own personal account. But they will not hesitate to churn your account, make unauthorized trades and recommend stocks designed to maximize their commissions – all at your expense.
If you have been the victim of any type of investment fraud, contact the lawyers at Mahany & Ertl, LLC. We can often handle your case on a contingent fee meaning no legal fees unless we recover for you. Don’t be a victim to bad brokers, investment advisors and financial planners that commit fraud.
Mahany & Ertl, LLC – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan: and Portland, Maine. Services available in most states.