FINRA Suspends Wells Fargo Broker For Failure To Comply
John Greg Schmidt, of Dayton, Ohio, a stockbroker formerly registered with Wells Fargo Advisors Financial Network, LLC, has been suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based on Schmidt’s failure to provide FINRA with information relating to his business activities. Case No. 2017056103801 (Nov. 29, 2017).
FINRA Public Disclosure confirms that Schmidt has been referenced in three customer initiated investment related disputes containing allegations of his misconduct while employed with Wells Fargo Advisors Financial Network, LLC, and Stifel, Nicolaus & Company, Incorporated. Particularly, a customer initiated investment related arbitration claim in reference to Schmidt’s conduct was settled for $80,000.00 in damages based upon accusations that Schmidt breached his fiduciary and contractual duties, negligently handled the customer’s mutual fund account, and committed fraud. FINRA Arbitration No. 07-02803 (Aug. 26, 2009).
On December 4, 2017, two customers filed investment related written complaints involving Schmidt’s conduct, alleging that Schmidt made off with the customer’s funds in October of 2017.
On October 24, 2017, Schmidt was fired by Wells Fargo Advisors Financial Network, LLC, supported by allegations that he effected the unauthorized movement of customers’ funds, and furnished ingenuine account statements to customers.
However, we have recently learned from ThinkAdvisor that:
A Montgomery County Grand Jury indicted Schmidt on 124 counts of forgery; two counts of theft from an elderly or disabled adult of more than $150,000; one count of telecommunications fraud over $150,000 but under $1 million; and one count of fraud or deceit by investment advisor of more than $150,000.
According to Prosecuting Attorney Mat Heck Jr., Schmidt created and falsified financial statements to investors in an effort to cover for the missing investments. Schmidt also sold securities without the knowledge or authorization of the investors and the defendant received commissions on those transactions of nearly $250,000.
“For years, this defendant defrauded a number of investors, many of them elderly or with dementia. He had to keep stealing from more investors in order to cover for the thefts from other investors,” Heck said in a statement.
A federal civil lawsuit has also been filed by the Securities and Exchange Commission. The SEC brought charges against Schmidt in September.
According to the SEC’s complaint, Schmidt sold securities of at least seven of his customers and secretly transferred more than $1 million in proceeds to 10 other customers to cover shortfalls in their accounts.
“From at least 2003 through 2017, Schmidt betrayed his customers’ trust by perpetrating a classic fraudulent scheme: He robbed Peter to pay Paul,” the complaint states.
Schmidt, who operated Schmidt Investment Strategies Group in Ohio,
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