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Securities America Faces $18 Million Lawsuit Following Former Advisor’s Cop to Ponzi Scheme
By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Friday, March 22, 2019.
George C. Miller
Partner
Location: San Diego, California
Phone: (619) 696-9500 (Ext. 105)
Direct: (619) 501-8270
Email: [email protected]
In late February 2019, former music industry executive Robert Jamieson and his family sued their former broker, Hector A. May, and the FINRA firm with which he was registered, Securities America Inc., seeking $18 million in damages arising out of May’s alleged fraud and misappropriation of their funds. The suit follows May’s December 2018 plea of guilty to operating a multi-million dollar Ponzi scheme for nearly two decades. May previously was the president of Executive Compensation Planners Inc., an SEC-regulated Registered Investment Adviser (RIA) firm (now defunct) that was affiliated with Securities America. Executive Compensation Planners and May’s daughter, Vania Bell, who served as the firm’s comptroller, also were named as defendants in the case.
According to the complaint, for nearly two decades, Securities America failed to detect numerous “stark red flags” of suspicious activity within May’s office and the Securities America client accounts he handled. Had Securities America detected May’s suspicious activity earlier, the Plaintiffs allege, their losses would have been substantially reduced. Plaintiffs claim May bilked them and other investors out of millions by, among other things, generating phony account statements and offering fake, “tax-free” corporate bonds.
Securities America has predictably moved to compel the case to FINRA’s Arbitration Division and will likely succeed on that motion. Virtually all brokerage firm customer agreements contain a broad, mandatory arbitration clause requiring any claims arising out of or relating to the firm’s services to be brought before FINRA’s Arbitration Division.
Partner George C. Miller can be reached in the firm’s San Diego office at (619) 696-9500.
Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes. We represent many broker-dealers, registered representatives, investment advisors, investors and businesses.
