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Former Merrill Lynch Financial Adviser Sentenced To 10 Years In Prison For Operating A $2.7 Million Ponzi Scheme

Former Bank of America/Merrill Lynch registered representative, Gary Lane, was sentenced to 10 years in prison for operating a Ponzi scheme that defrauded at least six investors of $2.7 million. Reportedly, Mr. Lane victimized elderly and unsophisticated investors by asking them to deposit funds into an account outside of Bank of America/Merrill Lynch. According to Daniel Bogden, the United States Attorney for the District of Nevada, Mr. Lane guaranteed investors that the money deposited into the account would be invested in U.S. Treasury Bonds, which would generate more than 6% interest and would mature in two years. Mr. Bogden also stated that the bonds never existed, and instead investors’ funds were deposited into Mr. Lane’s wife’s investment account. Mr. Lane would use the funds to pay other investors the purported interest and to pay personal expenses.

Investors should be cautious about investment opportunities that offer interest rates or returns that are in extreme excess of interest rates or returns generated from traditional investments. This was a lesson learned by victims of the Bernard L. Madoff Securities, LLC Ponzi scheme, the largest Ponzi scheme to date, which allured victims by generating much higher returns for investors than other financial advisery firms. Investors who are faced with investment opportunities that guarantee large interest rates and/or returns should conduct extensive due diligence to investigate the legitimacy of the financial adviser and/or financial institution recommending the investment. One tool available to investors is the Financial Industry Regulatory Authority, Inc.’s (“FINRA”) BrokerCheck, available at which, according to FINRA’s website, “is a free tool to help investors research the professional backgrounds of current and former FINRA-registered brokerage firms and brokers, as well as investment adviser firms and representatives . . . It includes current licensing status and history, employment history and, if any, reported regulatory, customer dispute, criminal and other matters. It should be the first resource investors turn to when choosing whether to do business or continue to do business with a particular firm or individual.”

Lax & Neville has extensive experience in successfully prosecuting claims on behalf of customers who have suffered losses, including claims against Merrill Lynch and losses incurred in a Ponzi scheme. Additionally, 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. Please contact our team of attorneys for a consultation at (212) 696-1999.

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