Imagine that you have woken up every day for eight years enjoying your secure retirement. Then, one day, you learn that the retirement portfolio you thought you owned, the foundation for your financial security, has vanished. This is exactly what happened to some unlucky Verizon retirees who trusted Richard Cody and his wife with their retirement portfolios, according to the U.S. Securities & Exchange Commission.
While working at Merrill Lynch, Mr. Cody persuaded a number of Verizon retirees to trust him with their portfolios. He then bounced to and from several investment firms, including Westminster Financial Securities, Concorde Investment Services, and IFS Securities. These Verizon retirees faithfully followed him from firm to firm, having no idea that their accounts had dwindled by over 90%.
Mr. Cody misrepresented the value of their positions, supplying them with bogus statements and tax documents. When Mr. Cody got in trouble with the Financial Industry Regulatory Authority (FINRA) for unsuitable, excessive trading and making misleading statements to clients and was suspended from the brokerage industry for an entire year, he managed to control his clients’ account through his wife, another financial advisor. His clients had no idea he had been suspended.
Retirement portfolios of over a million dollars had dwindled to almost nothing. It’s unclear where this money meant, but there is no indication that investors who have had the rug pulled out from under them will find their financial footing anytime soon.
One potential avenue of recovery for investors includes claims against the investment firms where Mr. Cody worked. Investment firms have an obligation to take reasonable steps to supervise their employees. One has to wonder what these firms were doing while Mr. Cody was misleading their customers. At the same time, some credit for uncovering this alleged scheme has to go to IFS Securities, which detected forged signatures on client documents and terminated Mr. Cody just weeks before he joined IFS. To read a copy of the SEC’s complaint for yourself, click here.
If you have questions about investment losses, the securities litigation attorneys at Investor Defense Law LLP may be able to help, and offer free consultations. Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington State recover investment losses. We understand investment fraud and know how to sue investment advisors, brokerage firms, and financial advisors. To learn more, contact an investment fraud attorney at 800.487.4660.