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Raymond James Broker Barred by FINRA for Alleged Ponzi Scheme

Claus Foerster, a Greenville, South Carolina-based stockbroker formerly employed by Raymond James, has been barred by the Financial Industry Regulatory Authority (FINRA) for allegedly running a Ponzi scheme. FINRA’s complaint alleged that Mr. Foerster had solicited investments for a purported investment fund known as S.G. Investments, which was actually a bank account controlled by Mr. Foerster. FINRA further alleged that Mr. Foerster instructed thirteen (13) customers to move funds from their brokerage accounts to their personal bank accounts and then write checks payable to S.G. Investments. FINRA accused Claus Foerster of stealing nearly $3 million from the clients since 2000. Mr. Foerster signed a letter accepting FINRA’s punishment without admitting or denying FINRA’s allegations.

According to FINRA, Mr. Foerster furthered his scheme by providing some of the customers with fictitious account statements and provided at least two customers with purported dividend payments on a monthly basis. FINRA’s brokercheck records reveal that Mr. Foerster began his career at J.C. Bradford in New York in 1989 and was at Citigroup Global Markets Inc. in 2000, when the alleged Ponzi scheme began. He moved to Morgan Keegan & Co. Inc. in 2008 and came to Raymond James in February 2013 by way of acquisition. Mr. Foerster admitted to Raymond James that he had misappropriated funds through a phantom private investment fund he created. He was subsequently terminated by the firm on June 4, 2014.

Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of unlawful behavior which are in violation of industry rules and procedures. In order to protect customers from broker misconduct, FINRA rules require brokerage firms to establish and implement a reasonable supervisory system. The implementation of the rules requires supervisors to monitor its employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for losses stemming from their employees’ misconduct. As a result, account holders who have suffered losses in Mr. Foerster’s S.G. Investments Ponzi Scheme can bring forth claims to recover damages against broker-dealers like Raymond James, which have a duty to supervise employees in order to protect their customers’ interests.

Although Raymond James has already begun to make restitution to victims of S.G. Investments, investors are encouraged to consult with an attorney before accepting any form of settlement. Broker-dealers often offer less than what a defrauded investor may be entitled to and include clauses in legalese format in their settlement agreements to bar other possible claims. Speaking with an attorney before negotiating any settlement will increase the likelihood that your rights as investors are protected.

Are you a victim Claus Foerster’s S.G. Investments Ponzi Scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against financial professionals for unsuitable recommendations, and/or other unauthorized and fraudulent misconduct.

The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over , Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at pearce@rwpearce.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.