Articles Tagged with Wells Fargo Advisors

A former Wells Fargo registered representative in Daytona, Ohio is facing charges by the Securities and Exchange Commission for defrauding investors out of over a million dollars in a fraudulent scheme that targeted seniors. The SEC filed a complaint against John Gregory Schmidt with the United States District Court for the Southern District of Ohio on Tuesday. Allegedly, Mr. Schmidt made unauthorized sales and withdrawals from variable annuities to use the proceeds for covering shortfalls in other customer accounts. While Mr. Schmidt allegedly received over $230,000 in commissions, his customers were unaware of the transactions. When the scheme unraveled, it is reported that involved investors discovered that the account balances provided by their trusted financial adviser were false. Our investor fraud attorneys are currently investigating into customer claims against Mr. Schmidt.

The SEC complaint alleges that John Gregory Schmidt sold securities from seven of his investors and transferred proceeds to other customer accounts. Most of the securities were variable annuities that required letters of authorization, which Mr. Schmidt is alleged to have forged without client consent. Instead of notifying certain clients of their dwindling account balances, Mr. Schmidt allegedly sent false account statements and permitted excessive withdrawals. Unbeknownst to the client with account shortfalls, it is charged that the received money was illegally retrieved from other customer accounts. The SEC claims that Mr. Schmidt’s misrepresentations violate federal securities laws, including Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5.

It is important to note that John Gregory Schmidt’s alleged fraudulent actions appear to have targeted some of the most vulnerable people in society. Mr. Schmidt, who is 65 years old, ran a fraudulent scheme that targeted elderly victims not too far off from his age, according to the complaint. Several of his reported victims were suffering from medical conditions such as Alzheimer’s and other forms of dementia. Tragically, at least five of the defrauded investors have passed away and will never be able to see justice served.

According to a recent Acceptance, Waiver & Consent (“AWC”) submitted by broker Brian Berger with the Financial Industry Regulatory Authority (FINRA), Mr. Berger has been banned from associating with a broker-dealer in the securities industry.  According to the AWC, in June 2015 FINRA “initiated an investigation into allegations that Mr. Berger had misappropriated funds from elderly customers with registered with Wells Fargo Advisors LLC and MetLife Securities, Inc.”  Mr. Berger was reported to be licensed by Wells Fargo Advisors, LLC from July 2010 through July 2014, and with MetLife Securities, Inc. from July 2014 to April 2015.  It is further reported that he was briefly licensed by a different broker-dealer named Newbridge Securities Corporation from April to June 2015.

As stated in the AWC, Mr. Berger did not to voluntarily participate in FINRA’s investigation, and as a result was barred from the securities industry.

Mr. Berger’s publicly available CRD Report describes several customer complaints that he has faced since 2011.  The CRD Report shows that a customer alleged that there were unauthorized payments made against the customer’s account for discover card accounts owned by the financial advisor.  Though reported that the customer alleged damages of approximately $175,000, the allegations were reported as settled for approximately $186,000.