Morgan Stanley Files Lawsuit Against Ex-Broker Convicted in Kickback Scam
Morgan Stanley (MS) is suing ex-broker Darin DeMizio for legal fees. DeMizio was convicted over his involvement in a kickback scheme. Now, the financial firm wants him to pay back legal expenses because it says that he purposely defrauded the broker-dealer and hid the fraud while working there.
DeMizio was convicted five years ago for his scheme to pay kickbacks of $1.7 million to his brother and dad. He was sentenced to 38 months behind bars and ordered to pay Morgan Stanley $1.2 million in restitution.
Ex-Morgan Stanley and Wells Fargo Broker Pleads Guilty in Check Fraud Scam Involving Elderly Widow
Adorean Boleancu, a former Morgan Stanley and Wells Fargo (WFC) broker, has entered a guilty plea to wire fraud charges related to a $1.8 million check fraud scheme. His victim was a widow in her eighties. Boleancu admitted that he wrote checks without authorization on her home equity lines of credit and her brokerage account. The checks included payments to his relatives, a significant others, and companies where he had credit card accounts.
According to prosecutors, Boleancu was working for Morgan Stanley when he set up accounts for investor Tonna Treadwell in 2007. He left the firm a year afterwards but kept forging checks from her account through 2011 when he was a Wells Fargo broker.
Boleancu has repaid Treadwell $650,000. As part of a civil settlement with the Financial Industry Regulatory Authority, he agreed to be banned from the industry.
Ex-John Thomas Financial Broker Avoids Customer Complaints With Bankruptcy Filing
Scott Levine, a former John Thomas Financial broker, was granted momentary reprieve from the customer complaints that have been made against him after he filed for bankruptcy protection. Because of the filing, five customer complaints that named him and carry nearly $5 million in damage claims are now frozen.
The allegations against Levine involve purportedly unsuitable investments, private placements, and churning. His former firm, John Thomas Financial, was expelled by FINRA. However Levine continues to work as a broker with IAA Financial.
Under Section 362 of the U.S Bankruptcy Code, administrative actions and litigation are frozen so that those who are in financial trouble can financially recover. Now, however, some investor fraud lawyers are saying that the code is letting brokers continue to stay employed while the customer complaints again them wallow in bankruptcy court.
In FINRA’s BrokerCheck database, complaints directed to a bankrupt broker end up being marked “pending.” Arbitrators can’t rule on them until a bankruptcy judge lifts the order to freeze the claims.
Our stockbroker fraud law firm is here to help investors get back their losses. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.
Brokers dodge customer complaints with bankruptcy, Investment News, May 29, 2014
Morgan Stanley Sues Convicted Ex-Broker for Legal Fees, Bloomberg, May 27, 2014
Ex-Wells, Morgan Stanley broker pleads guilty in check fraud scheme, Reuters, September 17, 2013
More Blog Posts:
SEC Files Charges in Penny Stock Scams, Stockbroker Fraud Blog, May 27, 2014
SEC Takes Action to Stop Alleged Fraud Involving Transfer Agent, Institutional Investor Securities Blog, May 28, 2014
Insider Trading Headlines: Principal of Wynnefield Capital Now On Trial, Ex-Vitamin Company Board Member Settles His Case, and Clinical Drug Trial Doctors Face Charges Related to New Cancer Drug, Stockbroker Fraud Blog, May 23, 2014