rogue-advisor

FINRA has fined a Northport, N.Y. stock broker for slamming a blind, elderly widow’s account with excessive fees. According to regulators, Hank Mark Werner convinced the woman to buy an unsuitable variable annuity and then used the account to generate excessive trades and fees for himself. Werner began churning the widow’s account in 2012 after her husband, who was also blind, died. Werner had served both clients until that point. Regulators say the broker bought and sold securities every week or so, generating more than 700 trades from October 2012 to December 2015. His churning produced $210,000 in commissions for himself and $175,000 in losses for the widow.

A California insurance broker has been sentenced to 60 months in jail for stealing $1 million from a widow’s trust account.  The broker, Gary Thornhill, of Santa Clara, was convicted of wire and mail fraud, according to U.S. attorneys on the case. Prosecutors say Thornhill sold life insurance to a married couple in 1998. The husband died seven years later, leaving the wife as the only insured on the policy. In 2008, the agent was named trustee of the entity that became legal owner of the policy. Using that position, Thornhill withdrew $1.5 million from the policy’s cash value without securing the widow’s permission. As part of his punishment, Thornhill was ordered to pay $1.4 million in restitution and serve three years of supervised release after completing a 60-month jail term.

A New Jersey financial advisor has been arrested for selling clients more than $1.8 million in fake securities, annuities, and life insurance. According to federal authorities, the advisor, William E. Fitzpatrick, was charged with one count each of mail, wire, and securities fraud. The advisor’s crime was long-standing in nature. Starting in 2007, he owned and operated at least three financial advisor and tax-return firms. After persuading clients to invest with him, typically in non-traditional investments such as a video-game production company and a movie financing firm, as well as in traditional mutual funds, annuities, life insurance, and money market funds, he failed to invest their money as promised, Fitzpatrick used their checks, which were made out to him personally, for his own purposes. The advisor is currently facing a maximum jail term of 30 years and a $1 million fine for the mail and wire fraud counts. He’s also facing a maximum penalty of 20 years in prison and a $5 million fine for the securities fraud count.