Washington State Broker Burned Through $4 Million In Client Funds While Living Large

Friday, September 09, 2011 07:30
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Washington State Broker Burned Through $4 Million In Client Funds While Living Large

Tags: fraud

A 32-year-old broker in Washington State allegedly managed to lose or spend about $4 million of his clients' funds, while buying himself luxury cars and a $2 million house.

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According to the SEC, Richard Finger, principal of Black Diamond Securities, did several things wrong.

 

First, he gambled his clients' money -- about $4.9 million, mostly from friends and family -- on high-risk, high-frequency options strategies.

 

Not only did that generate $1.9 million in market losses, but it also racked up $2 million in commissions for Finger personally, which he diverted to various personal expenses.

 

Before his clients could complain, he then reportedly doctored their account statements. 

 

And when his own clearing firm noticed the destructive trading going on, he forged letters from his clients authorizing the trades.

 

He now faces criminal fraud charges and up to 20 years in prison if convicted. 

 

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