JOHN SCHMIDT Sentenced To Prison For Securities Fraud

Wells Fargo Advisors securities broker John Schmidt (CRD#: 708094, Dayton, Ohio) will reportedly serve 5 years in prison for securities fraud. Notably, the broker, whom Wells Fargo disaffiliated with on October 24, 2017, was convicted of 128 felony counts relating to fraud and forgery. It appears Schmidt operated a Ponzi Scheme, stealing investors’ funds to repay other investors while doctoring investors’ financial statements. Montgomery County, Ohio Prosecutors also disclosed that without investors’ knowledge or consent, Schmidt sold securities from investors’ accounts. Schmidt supposedly failed to show any remorse for his actions.

SEC, FINRA Bar John Schmidt For Fraud

John Schmidt’s conviction comes after the Securities and Exchange Commission (“SEC”) expelled Schmidt from the securities industry. Specifically, SEC issued an Order on March 8, 2019 in Matter #: 3-19025, identifying the sanction as appropriate due to a February 2019 final judgment which enjoined Schmidt from violating federal securities laws including Section 10(b) of the Exchange Act.

The SEC made some serious allegations in its September 2018 Complaint against Schmidt. First of all, SEC claimed that John Schmidt misappropriated more than $1,160,000 from seven investors’ accounts. Supposedly, Schmidt moved those investors’ assets to the accounts of ten other clients who sustained account value declines. Secondly, Schmidt gave clients fake account statements and told them that their investment returns would sufficiently address their withdrawals without affecting principal. Namely, SEC stated that Schmidt victimized mostly elder, retired investors, some of whom had dementia or Alzheimer’s. Schmidt evidently took in $230,000 in commissions relating to his misappropriation of investor funds.

 

Previously, FINRA barred John Schmidt. Evidently, Schmidt did not provide information to FINRA during its 2017 investigation. FINRA suspended Schmidt in 2017 but gave him time to cooperate to avoid further sanctions. Particularly, FINRA gave Schmidt three months to “request” the termination of his suspension. Evidently, Schmidt never made this request, so FINRA barred him in March 2018.

Wells Fargo Clients Allege Schmidt’s Unauthorized Liquidations, Misappropriation Of Funds

 

Wells Fargo investors filed six disputes about John Schmidt between October 9, 2017 and January 11, 2018. The four most recent disputes have one thing in common: they allege Schmidt misappropriated investor funds or absconded with money belonging to them. Supposedly, Schmidt engaged in this unlawful conduct between December of 2006 through November of 2017. As a result, Wells Fargo paid those clients more than $4,200,000 to settle those matters.

Lars Soreide Highest Ethical Standard Award 2018

Lars Soreide Highest Ethical Standard Award 2018

Also, two prior investor claims allege John Schmidt engaged in other sales practice violations. On customer alleged that Schmidt took money from the client’s accounts without permission. Supposedly, Schmidt also made excessive trades in that customer’s account. The other customer suggested that person misrepresented the customer’s holdings. Eventually, Wells Fargo settled those disputes by paying those customers nearly $1,050,000.

Did John Schmidt Cause You Losses?

Suffered losses by investing with John Schmidt? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The firm has recovered millions of dollars for investors who have suffered losses due to misconduct of brokers and brokerage firms.