AXA ADVISORS FINED $100,000.00 FOR NOT FIRING BROKER WHO RAN A MISSOURI PONZI SCHEME

AXA Advisors has been fined $100,000.00 by the Financial Industry Regulatory Authority (FINRA) for not investigating and firing a broker who was running a Ponzi scheme, which dates back to 2001. Kenneth Neely began to work with AXA Advisors in Clayton, Missouri in 2007 before FINRA permanently barred him from the financial industry in 2009. Mr. Neely's Ponzi scheme defrauded investors out of $600,000.00 who for the most part belonged to a church and were led to believe they were investing in a real estate investment trust. Be that as it may, AXA was aware of Mr. Neely's fraudulent activity in 2008 when AXA conducted a yearly audit of him, which revealed a spreadsheet with investor payout information. Mr. Neely falsely claimed that the figures were for a client who wanted to start and budget a business. Mr. Neely eventually pled guilty to mail fraud and converting and commingling funds. Mr. Neely was fired by AXA Advisors in 2009.

A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. According to FINRA, Mr. Neely used his investors' money to pay earlier investors while generating sham invoices, which represented ownership certificates.

Selling away is the inappropriate practice of an investment professional that sells or solicits securities or investments not held or approved by the brokerage firm with which the professional is associated with. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales. AXA Advisors can be held liable for Mr. Neely's activities because it either failed to establish a reasonable supervisory system, or because it failed to implement an existing reasonable supervisory system. Even if AXA Advisors did not know of Mr. Neely's activities, it can still be liable to investors for damages for not investigating into Mr. Neely's computer records, lies, and questionable history.

Have you suffered investment losses in Kenneth Neely's Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

TEXAS PONZI SCHEMES: INVESTORS SUE MORGAN STANLEY SMITH BARNEY AND PROVIDENT ROYALTIES

11 investors in Dallas, Texas are suing Morgan Stanley Smith Barney and one of its financial advisers, Delsa Thomas, for running a Ponzi scheme. A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. The investors alleged that Ms. Thomas took advantage of their trust by suggesting that they invest in Tejas Eagle Financial LLC; Ms. Thomas established an investment range of $125,000.00 to $250,000.00, which was made up of her investors' retirement and savings money. Investors also contended that Ms. Thomas' recommendation was unsuitable and was bound to destroy whatever amount they had invested and that Morgan Stanley Smith Barney breached its duty of care by allowing her to give investment advice that was unsuitable. Damages are being sought under vicarious liability, fraud, negligent misrepresentation, and negligent supervision.

On another note, a federal court in Texas has sentenced Joseph Blimine to 20 years for running two oil and gas Ponzi schemes that began in Michigan in 2003. Mr. Blimine and other fraudsters made over $28 million before starting Provident Royalties in 2006 for the purpose of carrying on with their Ponzi scheme in Texas; close to 7,700 investors were defrauded out of over $400 million. Mr. Blimine pled guilty to the criminal charges brought against him by the Securities and Exchange Commission following a lawsuit against Provident Royalties, Provident Asset Management, and 21 other entities that offered and sold the investment.

Due diligence requires a reasonable investigation of all material facts before entering into an agreement or transaction with another person or entity. It is a measure taken to prevent unnecessary harm to an innocent party. The measure would require an entity offering and selling a security to analyze the legitimacy, nature, and risks associated with the product. An investor in Provident Royalties can claim damages against the entity that sold the investment for not performing its due diligence prior to the offer and sale.

Have you suffered investment losses in the Delsa Thomas or Provident Royalties Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.