Published on:

The SEC Charges Former LPL Financial LLC Adviser With Stealing $2 Million In Client Funds

The Securities and Exchange Commission (“SEC”) filed a complaint against former LPL Financial LLC (“LPL”) investment adviser, Blake Richards, in the United States District Court of the Northern District of Georgia. The SEC Complaint alleges that Richards misappropriated client funds that “constituted retirement savings and/or life insurance proceeds from deceased spouses.” See SEC vs. Blake Richards, Index No. 13-cv-01729 (JEC). The SEC Complaint states that Richards misappropriated at least $2 million from at least 6 different customers. According to the SEC, Richards would instruct customers to write checks out to an entity called “Blake Richards Investments” or “BMO Investments” and promised the customers that he would invest their funds through his investment vehicle in life insurance policies, fixed income assets, variable annuities, or well-known stocks. Further, contrary to Richards’ representations, he converted the customers’ funds for his personal use. Moreover, to cover up his scheme, Richards, on at least one occasion, provided a fictitious account statement to a customer on purported LPL letterhead. Further, when customers would request that Richards liquidate their holdings, Richard would usually deliver the funds with a cashier’s check or personal check. The SEC also filed a temporary restraining order seeking that a court freeze Richards’ assets as they constituted the converted customer funds. Interestingly, a Vice President of Independent Bank of Georgia, an entity where Richards maintains his personal accounts, filed a Response to the SEC’s temporary restraining order stating that all that remains in Richards’ accounts as of the day of the filing of the temporary restraining order was $108.44 in his personal checking account, $100.00 in a business checking account and 2,500 shares of Independent Bank of Georgia stock. It is unclear whether Richards holds any other assets at other financial institutions. The court has yet to rule on the SEC’s pending temporary restraining order.

Lax & Neville LLP has nationally represented small broker-dealers, financial services professionals and securities industry companies in regulatory matters and securities-related and commercial litigation. Additionally, Lax & Neville has extensive experience in successfully prosecuting claims on behalf of customers who have suffered losses as a result of sales practice abuses. If you were a customer who invested with Richards, please contact our team of attorneys for a consultation at (212) 696-1999 to discuss your potential matter.