Early this month a Missouri based
broker-dealer entered into a Consent Order with the Missouri
Securities Division. In doing so, the broker-dealer consented
to a finding that it failed to supervise one of its agents and failed
to have in place sufficient policies and procedures to detect and
identify violations of the securities laws by its agents.
The Cosgrove Law Group represented one
of the clients victimized by the broker-dealer's agent. According to
the Consent Order, the agent, now deceased, deposited at least eighty
(80) checks from clients in his Gateway Financial Resources account,
and used a portion of these funds for his personal expenses. The
funds were generated in some instances pursuant to the agent's
recommendation to client's that they liquidate their investments.
The broker-dealer paid at least
$700,000 to the various victims and, pursuant to the Consent Order,
over $100,000 to the State.
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