SEC Joins FINRA in Barring Arrested WF Broker John Schmidt over Elder Fraud

Attorney Advising Disclaimer

Two months after his arrest for fraud and forgery in an alleged Ponzi scheme targeting "particularly vulnerable" clients, including elderly investors and those with diminished mental capacity, such as Alzheimer's and dementia patients, former Wells Fargo Advisors representative John Gregory Schmidt suffered another setback as the SEC barred him from the securities industry.

The SEC's findings reveal that Schmidt (CRD #708094) misappropriated $1.16 million from vulnerable customers and transferred cash to others in a Ponzi-like fraud, misrepresenting to his clients material information, such as the true status of their accounts. For example, Schmidt purportedly sent customers fake account statements that grossly overstated balances and made false assurances as to returns, executing unauthorized variable annuity (VA) sales from certain clients in order to pay off others, all while concealing the misappropriation from his victims.

In addition to the unauthorized VA sales, stockbroker Schmidt reportedly used letters of authorization (LOAs) in a fraudulent manner, in order to liquidate securities and transfer additional money out of his customers' accounts, all while failing to disclose this use of LOAs to the affected customers. The SEC charged that Schmidt fraudulently induced at least one client to sign an LOA and recommended at least one such transfer through a false promise of returns.

Investigators wrote that broker Schmidt continued to reap rewards such as commissions while his customers suffered losses. At least five of Schmidt's victims reportedly died during the course of the fraudulent scheme.

FINRA previously barred stock broker Schmidt in 2017 for failing to respond to FINRA's request for information relative to the fraud, misappropriation, and elder abuse charges.

If you have invested with John Gregory Schmidt, formerly of the Wells Fargo Advisors Financial Network, or with any broker or financial adviser who fraudulently misappropriated funds or abused a letter-of-authorization or other financial document in order to illicitly transfer funds out of or liquidate your securities account, which 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.

Related Posts
  • Stifel Financial Agrees to Pay for Failing to Supervise Brokers Who Allegedly Stole Client Funds, Made Unsuitable Trades Read More
  • Morgan Stanley Broker Stole $3.5 Million from Clients, According to SEC, Arrested for Elder Exploitation Read More
  • Investor Loses $300,000 in Unapproved Securities-Based Loan Strategy Read More