Were You a Victim of Fraud Due to Investments with Financial Advisor Eric Erb?

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Erez Law is currently investigating financial advisor Eric Erb (CRD# 4595068) regarding a $3 million investment fraud. Erb was registered with Liberty Partners Financial Services, LLC in Babylon, New York from April 2013 to May 2014. Previously, Erb was registered with Securities America, Inc. in Babylon, New York from February to April 2013 and with Axa Advisors, LLC in Babylon, New York from 2002 to 2013, when he was terminated regarding, “Rr was permitted to resign while under investigation for potential unsuitable transactions and potential signature irregularities.”

In April 2018, Erb was sentenced to 57 months’ imprisonment to be followed by 3 years’ supervised release. In August 2017, Erb pleaded guilty to wire fraud in connection with a scheme to defraud investors in a hedge fund and other investment vehicles that Erb managed as an investment adviser and hedge fund manager from an office in Babylon, New York. As part of the sentence, Erb was ordered to pay $5.3 million in restitution to victims of his crime, a $5.3 million forfeiture judgment and to forfeit $215,000 in proceeds that he earned from the sale of his former residence in Bay Shore, New York.

According to the U.S. Attorney’s Office of the Eastern District of New York’s announcement, between approximately January 2016 and February 2017, Erb solicited approximately $5.4 million from investors under the promise that he would follow investors’ instructions when making various investments, including in Individual Retirement Accounts, annuities, real estate investment trusts, hedge funds and an initial public offering. “The victims were led to believe that their investments with Erb were earning profits, when, in fact, they were suffering losses and their investments were financing the defendant’s lifestyle of home renovations, country club dues and private school tuition. When these investments began to fail, Erb emailed investors false earnings statements showing that their investments were earning profits when, in fact, they were generating losses; made wire transfers between banks in Long Island and Florida to fund investments that investors did not authorize him to make; and falsified payee information on checks that investors wrote to fund investments so that Erb could use investors’ monies to benefit himself and his companies. During his plea allocution, Erb admitted to stealing approximately $3 million from 38 investors.”

In March 2016, FINRA sanctioned Erb to $20,000 in civil and administrative penalties and fines and suspended him for 18 months after he “consented to the sanctions and to the entry of findings that he used photocopied signature pages to open customer accounts and he also forged the signatures or initials of additional customers in connection with securities purchases. The findings stated that although the customers authorized the transactions at issue, Erb did not have their permission to sign their names or initials or use photocopied signature pages. Erb also photocopied the signature of his branch manager on supervisory approval forms in connection with securities purchases, thereby evading branch manager review of those transactions. The findings also stated that Erb misrepresented or omitted material information to customers by inaccurately representing within purchase forms that the customers would incur no surrender charges, redemption fees, or costs for relinquishing their annuity contracts. In fact, the customers incurred surrender fees or penalties ranging approximately from $3,000 to $12,000. The findings also included that Erb recommended that a customer, a 74-year old retiree, surrender annuities and purchase approximately $147,000 in an illiquid, non-traded REIT. Erb’s recommendation was unsuitable because it was not consistent with the customer’s investment objective and risk tolerance and because it placed more than half of the customer’s liquid net worth in a single, high risk, alternative investment.”

Erb has been the subject of three customer complaints in 2017, according to his CRD report:

  • November 2017. “Claimants and others allege RR forged their signatures in order to transfer and misappropriate their money.” The case is currently pending.
  • November 2017. “Claimant alleges RR misappropriated funds and invested her retirement funds in unsuitable annuities between 2006 and 2017.” The customer is seeking $450,000 in damages and the case is currently pending.
  • July 2017. “Claimant alleges that registered representative forged his signature and misappropriated Claimant’s tax sheltered annuity.” The customer is seeking $300,000 in damages and the case is currently pending.

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, his former brokerage firms may be liable for investment or other losses suffered by Erb’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and 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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Author: Jeffrey Erez

The founder of Erez Law, Jeffrey Erez, focuses exclusively on securities arbitration and litigation. Mr. Erez passionately believes in representing aggrieved investors and obtaining justice for his clients through litigation.