According to the Financial Industry Regulatory Authority (FINRA), former Wells Fargo Advisors Financial Network, LLC advisor, John Schmidt, has been accused by the U.S. Security and Exchange Commission (SEC) of misappropriating over $1.16 million from at least seven clients.
In September 2018, the SEC filed a complaint alleging that over the past 35 years Schmidt attracted a loyal base of retail brokerage customers, most of whom were elderly retirees with little to no financial expertise. Several of his alleged victims suffered from Alzheimer’s disease or other forms of dementia, and at least five of Schmidt’s clients passed away during the course of the complained of fraud.
According to the SEC’s complaint, for at least 14 years beginning in 2003, Schmidt—acting without customer authorization—repeatedly sold securities belonging to some of his brokerage customers and secretly transferred the sale proceeds to cover shortfalls in the accounts of other customers. Rather than tell his customers the truth about their diminishing accounts, Schmidt allegedly sent fake account statements overstating their account balances, and falsely assured his customers that their investment returns could fund their withdrawals without jeopardizing their principal.
The SEC asserts that Schmidt has committed securities fraud by making material misrepresentations and omissions to investors, and by misappropriating over $1.16 million of client assets. . Schmidt has also been barred by FINRA. FINRA regulates the securities industry by focusing on investor protection and ensuring market integrity, and is overseen by the SEC.
If you or someone you know invested money through John Schmidt, our firm’s team of experienced investment fraud lawyers can help. Fishman Haygood has helped hundreds of retirees recover their losses due to broker fraud or negligence. Contact Fishman Haygood today at 504-207-5010.