Improper Bank Account Withdrawals

For as long as people have been entrusting their money to others, some of those others have been figuring out ways to take it. And while the majority of brokers and money managers are professionals who follow the rules, there are certainly quite a few unethical individuals, many of whom repeat similar schemes multiple times until they are caught – and some who repeat the schemes after they are caught and merely suspended or otherwise given a slap on the wrist. In many cases, these unethical brokers and financial advisors target trusting, elderly investors.

Financial professionals may violate financial industry-specific rules to get their clients’ money – such as executing unauthorized transactions and/or excessive trading to generate extra commissions – but in other cases, they just steal it. This may involve convincing a client to provide funds for some sort of off-the-books, “can’t-miss deal” like a real estate investment or hedge fund that doesn’t exist. In this scenario, a broker may make up a fake company and even create statements and other documents that look real, but in reality, they’re simply obtaining the money for personal use. Some clients are so trusting that they simply take a broker’s word for it about a deal, either providing the money or granting the broker Power of Attorney. If any of these clients are elderly and have diminished capacity, this constitutes elder financial fraud in addition to theft.

Brokers may also forge letters of authorization to have funds moved from a client’s account to one that the broker controls. This is how a Merrill Lynch broker was able to steal more than $1 million from two clients. Another common tactic involves a broker creating a new account that names him or herself as a joint account holder.

Often, a broker might just ask to borrow money. If he or she has built up trust with the client over a long period of time, the investor may not see anything wrong with this. The broker may even offer a promissory note or IOU with no intention of paying the money back. In any case, unreported personal loans are forbidden by Financial Industry Regulatory Authority (FINRA) rules and/or the policies of the broker’s financial firm.

Did a Broker Steal Money From You?

There’s no more helpless feeling than when you discover someone has stolen money from you, especially if it was a person you trusted. Fortunately, you may be able to recover your lost funds through litigation or securities arbitration. For a free consultation from an elder financial fraud and securities arbitration attorney, get in touch with the Silver Law Group. Our firm only works on contingency, which means you won’t owe us a fee unless we are successful in getting your money back. Contact us through our online form today.