A Financial Industry Regulatory Authority Inc. panel said that FSC Securities Corp. is responsible for a $1.2 million arbitration award for compensatory damages to investors that were bilked by Aubrey Lee Price, the infamous Ponzi scammer from Georgia who tried to fake his death to in 2012. FSC Securities is a broker-dealer with AIG Advisor Group (AIG).
The eight claimants contend that the brokerage firm did not supervise a number of brokers who sold them fraudulent securities that were part of Price’s $40 million Ponzi scam. According to their securities lawyer, Price and two other ex-FSC brokers persuaded clients to invest in the PFG fund, an unregistered investment fund, which was the main product of the scheme.
When the trading account sustained huge losses Price prepared account statements for investors that noted fake asset amounts and investment returns. The claimants believe that FSC failed to properly supervise its brokers and had numerous chances to detect that Price and the other brokers were selling away into the PFG fund while claiming “preposterous” return rates.
Price was an FSC broker from 2006 to 2008. Prior to that he worked at Citigroup Global Markets (C) and Banc of America Investment Services (BAC). Last year, a federal judge sentenced him to 30 years behind bars for bank fraud.
According to the Federal Bureau of Investigation, Price bilked many of his clients of their life savings. The former minister knew some of his victims from church where he gave seminars on investing as a Christian.
He pretended to commit suicide on his boat before heading off to Mexico and Florida. He left a suicide letter admitting to bilking individual investors and MB&T Bank.
Price is also accused of embezzling more than $21 million in capital from MB & T Bank and losing a lot of the money in high-risk equity securities and options. He also allegedly provided bank officials with false account statements.
After faking his death Price became a drug dealer and bodyguard for prostitutes. He was arrested in 2013 at a routine traffic stop when he showed a fake I.D.
In 2012, the SEC froze Price’s assets and accused him of targeting over 100 investors, primarily in Florida and Georgia. Many of his victims were elderly investors.
In an email to InvestmentNews, An AIG Advisor Group spokesperson noted that Price did not start his hedge fund until the year after he left FSC Securities. The spokesperson also pointed out that a number of the hedge fund investments in the claim happened in 2011, over three years after Price left the firm. The brokerage firm maintains that it did not know anything about Price’s activities after he was no longer with FSC Securities. However, the SEC contends that Price started his scam in 2008.
Ponzi schemer haunts AIG Advisor Group in arbitration decision, InvestmentNews, April 14, 2015
Aubrey Lee Price, Former Bank Director Who Faked His Own Death, Sentenced to 30 Years in Prison, FBI, October 28, 2014