FINRA Permanently Bars Jeffrey C. McClure For Stealing From Elderly Client

FINRA recently announced that it has permanently barred Jeffrey C. McClure from the securities industry for converting nearly $89,000 from an elderly customer’s bank account while working for Wells Fargo Advisors, LLC and an affiliated bank in Chico, California. FINRA found that between December 2012 to August 2014, McClure wrote himself 36 checks totaling $88,850 drawn on the customer’s affiliated bank account without her knowledge or consent. The elderly client had authorized McClure to pay her rent and other expenses as agreed, but McClure deposited the checks into his personal bank account and used the funds for his personal expenses. The affiliated bank has made the customer whole for her losses.

McClure’s misconduct is an example of financial elder abuse. Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, a firm may be liable for investment or other losses suffered by its customers as a result of financial elder abuse or other misconduct. According to the National Center for Prevention of Elder Abuse, elder financial abuse spans a broad spectrum of conduct, including:

• Taking money or property

• Forging an older person’s signature

• Getting an older person to sign a deed, will, or power of attorney through deception, coercion, or undue influence

• Using the older person’s property or possessions without permission

• Promising lifelong care in exchange for money or property and not following through on the promise

• Confidence crimes (“cons”) are the use of deception to gain victims’ confidence

• Scams are fraudulent or deceptive acts

• Fraud is the use of deception, trickery, false pretence, or dishonest acts or statements for financial gain

In the securities context, financial elder abuse also may include sales violations, such as recommending risky products or investments strategies which are incompatible with the elderly investor’s life situation. In Regulatory Notice to Members 07-43, Senior Investors (“NTM 07-43”), FINRA reminds firms of their obligations to senior investors and highlights industry practices to serve senior investors. Significantly, NTM 07-43 discusses suitability, and reminds members that “firms cannot adequately assess the suitability of a product or transaction for a particular customer without making reasonable efforts to obtain information about the customer’s age, life stage and liquidity needs.”

As baby boomers and other investors age, financial elder abuse cases will only increase. David Lerner Associates, Inc., for example, was fined $2.3 million by FINRA in 2012 for its unsuitable sales of a non-traded REIT to thousands of elderly investors. FINRA also ordered the firm to pay $12 million of restitution to investors, and Brad Bennett, FINRA’s Executive Vice President and Chief of Enforcement, said the firm “targeted unsophisticated and elderly customers, grossly failing to comply with basic standards of suitability in selling Apple REIT Ten to thousands of customers.”

If you have suffered investment losses or financial irregularities, please contact Sonn Law Group to explore your legal options. Sonn Law Group is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 844-689-5754 or complete our “contact form.”