“The other way he would get money is he would go into her investment accounts and sell off mutual funds that she owned that were valid and making money to free up cash to wire to himself,” Bessette said.
When the client became frustrated because he refused to give her funds to purchase a home on a bus route so her special-needs daughter would have access to transportation, the client told a neighbor, who became alarmed and immediately called police.
“The police quickly realized there was a problem with the advisor and referred the case to us,“ Bessette said.
This investigation, unlike so many, had a happy ending. “In this case we sort of lucked out,” Bessette said. “The agent was willing to settle with us. He returned her $300,000 and was fined a certain amount. It was lucky for all involved. The priority is definitely to get restitution for the investor.”
The advisors’ other investors were his parents. His father, a plastic surgeon, had invested $200,000 with his son and coughed up the other $300,000 for the settlement, presumably to keep the son out prison, Bessette said.
“Through this podcast we hope listeners will have a better understanding of what investment fraud looks like and the role of state and provincial securities regulators in protecting investors,” NASAA President Christopher W. Gerold said.
“Real Life Regulators” is available on iTunes and Google Play and on the NASAA website, www.nasaa.org.