Scott Martin

ContactScott Martin has been covering the financial markets since 1996 and the securities business since 2001. He was a long-time columnist for Research, market writer at CNNfn.com, and editor of Buyside; his work currently appears in publications like The Trust Advisor, Institutional Investor, and EmergingMoney.com.
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South Dakota Ponzi Scheme That Touched Edward Jones Is Now On The Radar Of FBI Agents, Securities Lawyers edit
Thursday, September 29, 2011 07:44

Another bad broker in the Edward Jones barrel raises serious questions about the firm's legendary small office culture for federal agents and securities lawyers alike.

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Granted, when Edward Jones management found out that two of its South Dakota reps were engaged in an alleged $100 million Ponzi scheme, it fired them fast

 

But nobody knows whether the firm would have spotted the reps shifting client assets off the Edward Jones platform and into the scheme if its network of solo and two-advisor shops wasn't so diffuse and hard to police.

 

Spending just one business day a year with each of the firm's 12,000 reps would keep about 50 compliance officers on the road constantly.

 

Of course, strict and proactive compliance is possible even in this kind of business model, and that's exactly what Edward Jones did when they found out that their reps were selling those accounts away.

 

But with the feds taking a direct interest in the case, the securities lawyers are circling with investigations of their own.

 

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