A federal jury in Boston found that Sage Advisory Group and its owner Benjamin Lee Grant, engaged in securities fraud by misleading his former customers at Wedbush Morgan Securities to transfer their assets to Sage. In the case filed by the Securities & Exchange Commission (SEC), civil penalties and return of profits were sought against Sage and Grant.
According to Andrew Ceresney, SEC enforcement director, “This case sends an important message to investment advisors that they must put the needs of their clients before their own”.
Grant worked for Wedbush until leaving in 2005 to launch Sage. He had customer accounts totaling $100 million in assets, which were managed by First Wilshire Securities Management. To induce his customers to follow him to his new venture Grant falsely told them that it was First Wilshire’s idea to move their accounts from Wedbush to a discount broker and that he had formed Sage to manage their investments. Grant also misrepresented the fees he would be charging at the new firm.
His plan worked according the the SEC, with nearly all of his clients following to Sage where his compensation doubled from under $500,000 to over a million.
Brokers do move from firm to firm and generally it is for a legitimate reason. If your broker is changing firms, and suggests that you move your account, you have a right to know why he is moving and for a full disclosure of how the new fee structure compares to the old.
Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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