Massachusetts Financial Advisor Charged with Misappropriation of Client Funds
Jeffrey B. Pierce of Waltham, MA, a former financial advisor and registered representative with MidAmerica Financial Services, was charged on June 30, 2015 by the Enforcement Section of the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth in connection with allegations that Pierce willfully engaged in fraudulent, dishonest, and unethical activities including directing $467,796.61 from a client account, with at least $347,775.33 going to personal accounts. In the matter of: Jeffrey B. Pierce (Mass. Securities Division Docket No. E-2014-0015 Filed June 30, 2015).
According to the Complaint, during Pierce’s employment with Sovereign Bank between October 2, 2000 and May 14, 2008, Pierce allegedly exploited the trust of one of his clients (“Client One”), where Pierce directed a substantial portion of Client One’s retirement savings to his own personal accounts. The Complaint indicates that in 2011, Pierce allegedly made unauthorized withdrawals from Client One’s annuity contracts that he encouraged the client to set up back in 2009.
The Complaint further states that Pierce made a payment of over $23,000 to his personal Discover credit card using money held in Client One’s annuity, where Pierce attempted to seek a refund from Discover for $11,000 to be transferred to his personal bank account. The Complaint indicates that after Discover denied his request, Pierce obtained over $9,500 of the funds via cash advances. The Complaint alleges that Pierce acted deliberately to conceal his activity from Client One by replacing his Client One’s home address listed on his annuity accounts with Pierce’s business address for Client’s One’s annuity accounts – such that confirmations associated with the account were sent directly to Pierce instead of Client One.
Pierce Barred From All FINRA-registered Firms
Just recently on July 14, 2015, Pierce was barred from association with any FINRA-registered firm in all capacities after Pierce failed to cooperate with a FINRA investigation in connection with the aforementioned allegations that Pierce converted funds from the non-securities account of a former customer. FINRA Letter of Acceptance, Waiver and Consent No. 20150451660-01 (July 14, 2015).
According to the Acceptance, Waiver and Consent (“AWC”), Pierce acknowledged that he received FINRA’s Rule 8210 investigation request, yet informed FINRA staff that he would not cooperate with FINRA’s investigation. Registered representatives like Pierce who do not cooperate with FINRA’s investigations often face a permanent bar from practicing in the securities industry as such lack of cooperation violates FINRA’s Rule 8210 – requiring that no member or person shall fail to provide information or testimony or permit an inspection and copying of books, records, or accounts pursuant to the rule.
Public Disclosure Records
Public disclosure records reveal that Pierce has been subject to at least 5 customer disputes from 2008-2015. In one of those disputes, Pierce settled a claim for $15,680.00 after a customer alleged that variable annuity purchases in 2005 were unsuitable and reallocations of subaccounts were unauthorized. He settled a similar dispute in 2009 for $9,131.70. Pierce also faces a pending customer dispute in 2015, where a client’s estate alleged Pierce misrepresented variable annuity purchases, that such products were unsuitable, and that Pierce had even converted client funds.
Also according to public disclosure records, in 2008, Pierce was terminated (permitted to resign) from IFMG Securities for failing to follow firm policy with respect to processing of annuity contracts. In that instance, Pierce allegedly circumvented IFMG procedures in order to conceal certain unsuitable annuity switches. Pierce was subsequently employed at Sagepoint Financial, Inc., where he was discharged in 2009 after allegations that Pierce violated the firm’s policies and procedures concerning rules against commingling funds by taking affirmative steps to effect such a prohibited act.
Prior to Being Barred, The NAC Reported
Prior to Pierce being permanently barred by FINRA, on October 1, 2013, The National Adjudicatory Council (“NAC”) of FINRA affirmed, in part, the Hearing Panel’s decision finding that Pierce falsified firm records, concealed seven annuity switches from his FINRA member firm employer, and intentionally misrepresented adverse tax consequences of six annuity switches to his FINRA member firm employer. As a result, the NAC suspended Pierce in all capacities for six months and fined him $25,000. DOE v. Pierce, Complaint No. 2007010902501, 2013 FINRA Discip. LEXIS 25 (NAC Oct. 1, 2013).
Investors suffering losses or damages caused by Jeffrey B. Pierce in connection with his aforementioned conduct may be able to recover their investment losses.
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