FINRA ordered Fidelity Brokerage Services LLC to pay over $1 million for failing to follow up on red flags to detect or prevent theft from senior investors. Fidelity must pay a $500,000 fine and approximately $530,000 in restitution in response to the $1m theft from a handful of elderly clients.
According to the investigation, fraudster Lisa Lewis posed as a Fidelity broker in order to obtain personal information from her senior citizen victims, apparently using that information to then systematically steal over $1 million through transfers and debit card transactions.
The findings state that Lewis ran her conversion scheme by convincing her senior investor victims to establish joint accounts at the firm in which Lewis was listed as an owner. FINRA says Lewis established over 50 accounts in this fashion, and converted funds from them for her own personal benefit.
Investigators claim that Fidelity failed to detect or appropriately respond to several red flags, such as common e-mail addresses, physical/mailing addresses or phone numbers shared by the multiple accounts. Another red flag FINRA says Fidelity failed to detect pertained to Lewis' "consistent" pattern of moving money through the accounts.
Finally, the investigation states that Fidelity overlooked red flags in the form of telephone calls into the firm's customer service call center in which callers' statements indicated that Lewis may have been impersonating and/or taking advantage of her senior citizen investors.
The FINRA action against Fidelity Brokerage Services follows Lewis' 2014 guilty plea to charges of wire fraud; Lewis received a 15 year prison sentence and order to pay her victims over $2 million in restitution.
If you have invested with Fidelity Brokerage Services, fraudster/fake broker Lisa Lewis, or with any firm or financial adviser whose fraudulent conversion of funds out of your investment account(s) or other nefarious conduct without your consent or knowledge has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
News Release: FINRA Sanctions Fidelity Brokerage Services LLC $1 Million for Supervisory Failures (FINRA)