According to information provided by the Department of Justice, Paul McGonigle, formerly an advisor with LPL Financial, stands charged in a superseding indictment and could face a prison sentence of up to 37 years. He is accused of defrauding elderly clients and stealing from their retirement nest egg.
He has been charged with two counts of money laundering and one count of investment adviser fraud. Earlier, in June 2021, he was arrested and charged with one count of mail fraud, one count of aggravated identity theft, and three counts of wire fraud.
McGonigle is an industry veteran, having spent 34 years in it. He spent a continuous 20 years at SII Investments before moving to LPL in 2018.
The case
The theft started in February 2015 and continued till May 2021. The modus operandi adopted by McGonigle for making unauthorized withdrawals from customer accounts was to impersonate his victims on calls with annuity companies and forge their signatures on withdrawal forms and other requests.
15 clients “who were elderly or in poor physical and mental health” are reported to have lost more than $1.4 million. Even after having been barred by the Financial Industry Regulatory Authority (FINRA) in November 2020 for failing to provide the information requested, McGonigle, it appears, continued his nefarious activities for several months.
Possible punishment
The law prescribes the following punishment for the different charges:
Money laundering – up to 10 years in prison and three years of supervised release.
Investment adviser fraud – up to five years in prison and three years of supervised release,
Aggravated identity theft – mandatory consecutive sentence of two years in prison and up to one year of supervised release.
Mail and wire fraud – up to 20 years in prison and three years of supervised release.
Each of the above charges also provides for a fine of up to $250K, or twice the amount gained or lost by committing the offense, whichever is the greater of the two.
TYPES OF CLAIMS AGAINST FINANCIAL ADVISOR OR STOCKBROKER
It is important to understand securities law and FINRA regulations in order to determine if you have a valid claim against a financial advisor. The investment-loss recovery lawyers at Haselkorn & Thibaut have over 50 years of combined experience in investment law.
They have assisted many investors to recover financial losses due to negligent or bad financial advisors. We have dealt with hundreds of cases that involved financial advisors’ misconduct.
NEGLIGENCE
You don’t need to prove that the financial advisor deliberately acted in a detrimental way. It is enough to show that they failed to fulfill a duty and caused the economic loss.
Your advisor might have recommended an inappropriate investment without taking into account your risk tolerance. You may have the right to sue your financial advisor for negligence if you lose money due to the recommendation investment.
BREACH OF FIDUCIARY DUTY
Financial advisors who breach their fiduciary duties have failed to uphold the required standard. Breach of fiduciary Duty: If your advisor fails to meet your objectives or doesn’t disclose information about a product, you may be entitled to damages.
The following are other examples of breaches to the fiduciary obligation:
- Unauthorized Trading
- Undiversified portfolio
- Unsuitable Investments
- Account churning.
These are all instances where the financial advisor failed to act in your best interests.
FAILURE TO SUPERVISE
A brokerage firm is responsible for supervising its financial advisors, and any other employees. Failure to comply with this requirement can lead to financial losses.
