Block & Landsman Represents Clients Defrauded by Results One Adviser Steven Salutric

Block & Landsman is currently prosecuting a securities fraud lawsuit arising out of a fraudulent investment scheme that has been the target of the Securities and Exchange Commission. In July, 2012, the SEC imposed sanctions against Charles Rizzo and Gina Hornbogen, the owners of Results One Financial, LLC, for their failure to supervise adviser Steven Salutric after he misappropriated $7 million from fifteen clients. The SEC Order can be viewed here.

Salutric was employed by Results One Financial, which held client funds and securities at Charles Schwab & Co. Between 2002 and 2009, Salutric's fraudulent scheme involved his diversion of millions of dollars from the Schwab accounts by forging client signatures on wire transfer requests, which Schwab honored. In 2005, Schwab itself was sanctioned by the New York Stock Exchange for failing to properly supervise client accounts managed by such independent investment advisers who engaged in the same type of fraud.

If you believe you have been defrauded by Results One Financial, or if you believe that Charles Schwab & Co. failed to properly protect your accounts from fraudulent withdrawals, you may have a right to recover your losses. Please contact the securities fraud attorneys at Block & Landsman to discuss your case. 

Ameriprise and Affiliated Clearing Firm Fined for Failing to Supervise Transfer of Customer Funds

The Financial Industry Regulatory Authority (“FINRA”) announced a fine of $750,000 against Ameriprise Financial Services, Inc (“Ameriprise”) and its affiliated clearing firm, Ameriprise Enterprise Investment Services, Inc. (“AEIS”).  The fine was levied against the firms “for failing to have reasonable supervisory systems in place to monitor wire transfer request.”   Though the fine relates to a compliance issue, the circumstances uncovering the supervisory issues involved an investment fraud perpetrated by an Ameriprise representative, Jennifer Guelinas. 

Guelinas, who is now barred from the securities industry (click here for more info), defrauded investors through a series of fraudulent transfers from clients’ accounts to accounts controlled by her.  This scheme took place from December of 2006 until October of 2010, during which time Guelinas converted over $500,000 from clients’ brokerage accounts.  Sadly, the three clients involved in this securities fraud were senior citizens. 

While neither affirming nor denying the charges, Ameriprise and AEIS consented to FINRA’s finding of failure at the firms to detect multiple red flags concerning Guelinas.  As stated by Brad Bennett, Executive Vice President and Chief of Enforcement at FINRA, "Ameriprise and its affiliated clearing firm missed numerous supervisory red flags, including the fact that two of the wire transfers went to accounts in Guelinas' name. Firms must have robust supervisory systems to monitor and protect the movement of customer funds."

This fraudulent arrangement was only possible because of Ameriprise’s failure to detect this long-operating scheme.  Altogether, Guelinas forged the signatures of her clients over 80 times on wire transfer requests.  This is in addition to forging clients’ signatures on three real estate closing agreements and one promissory note.