SEC Bars Merrill Lynch, Pierce, Fenner & Smith Incorporated Broker Richard Crabtree

Merrill Lynch

Erez Law is currently investigating barred former Merrill Lynch, Pierce, Fenner & Smith Incorporated broker Richard Crabtree (CRD# 1855649) who allegedly defrauded a customer. He has been registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated in Annapolis, Maryland since 1988, and he was on medical leave for the past two years. He was Senior Vice President and Resident Director of the Annapolis, Maryland branch office of Merrill Lynch, Pierce, Fenner & Smith Incorporated.

In September 2022, the Securities and Exchange Commission (SEC) barred Richard Crabtree for his participation in the offering of a penny stock and sanctioned him to pay a $40,000 civil and administrative penalty and fine. 

According to the SEC order, between 2016 and 2020, he allegedly deceived his customer into believing that he invested $250,000 into a private investment partnership that was held outside of Merrill Lynch, Pierce, Fenner & Smith Incorporated. “Crabtree falsely represented to the Client that the trading strategy was highly profitable and that the Client’s interest in the private investment partnership grew to as high as approximately $10 million,” according to the SEC. “However, Crabtree never invested any of the Client’s funds into a private investment partnership, and none of its profits were real. To perpetuate and conceal this fraud, Crabtree repeatedly falsified records, including portfolio review reports, trading records, data in the Investment Adviser’s system, and mortgage payout letters, and liquidated securities in one of the Client’s advisory accounts… Crabtree claimed that he mistakenly told the Client in a 2016 phone call that the value of the Client’s assets was $250,000 more than the actual value.”

It is alleged that he deceived “the Client by recommending that he invest $250,000 of the Client’s funds into a private investment partnership. Crabtree told the Client that the private investment partnership involved a leveraged trading strategy that focused on selling short 10-year United States Treasury bills, would mature in July 2019, and was held outside of the Investment Adviser. Crabtree also told the Client that he would divert dividends and interests totaling $250,000 from the Client’s accounts to invest in the private investment partnership, but Crabtree did not move funds from the Client’s accounts to invest in the private investment partnership that he offered to the Client. The private investment partnership never existed.”

According to the SEC, “During the relevant period, Crabtree told the Client that the private investment partnership generated high returns, and Crabtree provided the Client with fabricated records perpetuating that falsehood.”

Richard Crabtree Customer Complaints

He has been the subject of four customer complaints between 2003 and 2020, one of which was closed without action, according to his CRD report. The most recent complaint was regarding: 

September 2020. “The attorney representing the customer alleges misrepresentations from Fall 2016 until August 2020.” The customer sought $5,000,000 in damages and the case was settled for $1,250,000. 

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Merrill Lynch, Pierce, Fenner & Smith Incorporated may be liable for investment or other losses suffered by Richard Crabtree’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.

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Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form below for a free consultation.

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