SEC Brings Investment Fraud Action Against Former LPL Employee

July 9th, 2013
by Daniel Carlson
Seal of the U.S. Securities and Exchange Commi...

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

Daniel Carlson is a San Diego-based attorney focused on securities litigation who specializes in recovering investment losses for his clients.

Recently, accusations have been brought against a financial advisor affiliated with the LPL for committing investment fraud through the misuse of both his position and the trust of his clients in defrauding them.

The Securities and Exchange Commission (SEC) has alleged that Blake Richards, previously registered as a representative with LPL Financial and based in Georgia, misappropriated potentially more than $2 million sourced from no fewer than seven investors over the past five years.

Over the course of the past several years, while employed at LPL, Richards “had little to no commission production and few clients of his own.” Nonetheless, some of the clients that Richards did have were registered under a co-worker’s accounts because Richards himself lacked both insurance and the other licenses required for the legal assistance of his clients’ brokerage and business needs.

The SEC explains in its complaint that Mr. Richards engaged in investment fraud by telling investors that he was going to place their investment into assets with fixed income and variable annuities, in addition to other kinds of investment products. Allegedly, Mr. Richards’ clients had been told that they should write checks payable to either one of two different companies that he controlled: “BMO Investments” or “Blake Richards Investments.” Then instead of using the money to invest as he had promised, he then misappropriated the funds for himself according to the SEC complaint.

With at least two elderly investors involved, the largest portion of the funds comprised savings for retirement and/or proceeds from life insurance collected on spouses who were deceased. Moreover, it is alleged that Mr. Richards utilized account statements that were fictitious and prepared using letterhead from LPL Financial in order to cover up the scheme. Allegedly, Mr. Richards also misrepresented his title to investors as “Accredited Asset Management Specialist”, a College for Financial Planning professional designation.

In addition to the SEC’s preliminary injunction request, a permanent injunction is also being sought, along with the disgorgement of Richards’ wrongful gains—with interest prior to the judgment—and civil penalties.

If you think that you have been the victim of investment fraud, contact Daniel Carlson at the Carlson Law Firm today for a free consultation at 619-544-9300. Also, be sure to follow my firm on LinkedIn and Twitter.

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