The broker who pleaded guilty to one count of securities fraud for selling risky securities to four school districts in Pennsylvania has been sentenced to one year and a day in federal prison. Robert Bradbury, 63, must also pay a $10,000 fine.
The Pennsylvania school districts that were the victims of Bradbury’s investment fraud scam are Red Lion, North Penn, Boyertown, and Perkiomen Valley. The securities fraud scheme cost taxpayers over $10 million.
From 1998 to 2004, Bradbury illegally sold bond-anticipated notes for the Whitetail golf project. According to Eastern District of Pennsylvania’s U.S. Attorney Pat Meehan, the broker, who had worked with the school districts for three decades, took advantage of their trust when he underwrote and sold them the notes but failed to fully disclose the nature of the investments and the risks involved. While the four school districts are only allowed to make investments that fall under certain conservative categories.
Upon the notes’ maturity, the Hummelstown General Authority defaulted and ended up selling the golf course for $3.8 million. In 2008, the US Securities and Exchange Commission sued Bradbury and his broker-dealer, Dolphin & Bradbury Incorporated, for defrauding the school districts.
“A large number of school districts have been defrauded in this manner,” said securities fraud attorney Robert Kantas of Shepherd Smith Edwards & Kantas, LLP. “Our stockbroker fraud law firm currently represents five such districts that have been collectively exposed to more than $200 million in losses. We are also investigating “Ponzi” schemes and fraud that caused municipal and other pension funds losses. Those who oversee taxpayer’s assets and pension funds have a fiduciary duty to take action to recover such losses!”
Related Web Resources:
Broker sentenced in Pa. school fraud scheme, Associated Press, December 15, 2009
West Chester man sentenced for securities fraud in school districts case, BizJournals, December 15, 2009
Grand Jury Indicts Robert Bradbury for Defrauding Pennsylvania School Districts, SEC.gov, December 13, 2009