UPDATE! Claus Foerster Sentenced to Only Two Years for $3 Million Ponzi Scheme
Claus Foerster, Former Raymond James and Morgan Keegan Advisor, Sentenced to Only Two Years for $3 Million Ponzi Scheme
Have you lost money investing with Claus Foerster of Greenville, South Carolina? According to wsoctv.com, Foerster was indicted in March 2016 for running a $3 million Ponzi scheme. Foerster was previously employed as a financial advisor with Raymond James and Morgan Keegan. Greenville Online recently reported that Claus Foerster was sentenced to serve two years in a federal penitentiary for his crimes, followed by three years of supervised release.
Claus Foerster was previously barred by FINRA, the Financial Industry Regulatory Authority. Foerster opened his own bank account under the name “S.G. Investments” and then solicited it to his customers at Raymond James and other firms as an “income-oriented” investment. He then instructed his securities customers to move funds from their brokerage accounts into their own personal bank accounts and then to write a check directly from their bank accounts made out to “S.G. Investments” for investment purposes. FINRA has alleged that “S.G. Investments” was not an investment fund but rather Foerster’s own personal bank account of which he had full control.
Not only was Foerster collecting personal checks from his clients at Raymond James & Associates and other firms, and depositing them into his own bank account which he named “S.G. Investments”, but he decided to create fictitious monthly account statements as well as, allegedly providing at least two of his victims with purported monthly dividend payments. FINRA alleges that Claus C. Foerster converted approximately $3 million dollars from 13 customers. Foerster signed a letter dated June 17, 2014 accepting punishment from FINRA without admitting or denying his actions.
FINRA alleges that Claus C. Foerster’s Ponzi scheme began in approximately 2000.
Broker-dealers like Morgan, Keegan & Company; and Raymond James & Associates, Inc. have a responsibility to adequately supervise all representatives who are registered through their firm, including investments sold by their registered representatives. Broker-dealers also must take steps to ensure that their financial advisors follow all securities rules and regulations, such as to ensure that investments are suitable for clients. The securities firm must perform adequate due diligence on an investment before recommending such to a client, so that the firm can adequately explain the risks and characteristics of the investment to an informed client. When broker-dealers fail to adequately supervise their registered representatives, make unsuitable investment recommendations, or fail to perform adequate due diligence on an investment, they may be liable for investment losses sustained by customers.
Israels & Neuman PLC is a securities and investment fraud law firm with offices in Chicago; Ann Arbor Michigan; Denver, Colorado; and the Seattle area. We represent investors in FINRA arbitration proceedings in all 50 states, including investors in South Carolina. Our attorneys have represented over one thousand investors against many brokerage firms in the past.
Click to view: Foerster CRD Report
HAVE YOU OR SOMEONE YOU KNOW BEEN A VICTIM OF CLAUS FOERSTER’S PONZI SCHEME?
Aaron Israels: (720) 599-3505
David Neuman: (206) 795-5798
Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency. Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency. All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact. This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice. Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis. In contingent representation, clients may still be liable for costs.
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