The Oregon Department of Consumer and Business Services has issued a cease-and-desist order and fined investment firm AXA Advisors LLC $75,000 for failing to supervise a former registered representative who allegedly defrauded $1.9 million from customers over a 17-year period, the agency reported Thursday.
According to the Department, from 1989 to 2006 Jacqueline Atkinson, 67, of Bend, Ore., sold fictitious investments with promised guaranteed rates of return ranging from 6 percent to 10 percent.
Instead, Atkinson allegedly deposited those client funds into her bank account and used them for her personal expenses, the agency said.
As part of the order, AXA, a division of AXA Equitable Financial Services, agreed to compensate clients that Atkinson defrauded.
The Department's Division of Finance and Corporate Securities found that AXA failed to diligently supervise Atkinson and failed to frequently examine all customer accounts to detect and prevent irregularities.
"The return on the investments sold in this case were consistently high, which should catch an investor's attention, particularly when the market fluctuates," said David Tatman, the Depatment's administrator. "I encourage all investors to read and understand their statements and contact their broker's or advisor's company with concerns."
A Department spokeswoman said AXA had discovered the fraudulent activity and reported it on Mar. 7, 2007. AXA cooperated with the Department during the investigation and restored defrauded customer accounts to their original balances and, in some instances, paid clients the amount they invested plus interest.
- Jim McConville