Did You Lose Money Investing in LPL Financial LLC Financial Advisor Charles Fackrell’s Ponzi Scheme?
Posted on Wednesday, November 8th, 2017 at 4:06 pm
Erez Law is currently investigating LPL Financial LLC financial advisor Charles Fackrell (CRD# 5369665) regarding securities fraud and involvement in a $1.4 million Ponzi scheme. Fackrell was registered with LPL Financial in Yadkinville, North Carolina from 2010 to 2014. In December 2014, Fackrell was terminated from employment at LPL Financial based on allegations that he participated in unapproved private securities transactions and his felony arrest that same month for obtaining property under false pretenses.
In October 2017, LPL Financial LLC was ordered to pay a $25,000 fine and reimburse the state of South Carolina $270,000 for the cost of investigating Fackrell’s Ponzi scheme. A Ponzi scheme is a form of fraud in which the belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. Fackrell was also ordered to serve three years under court supervision after he is released from his 63-month prison sentence, as well as to pay almost $820,000 in restitution to clients.
In February 2015, FINRA barred Fackrell regarding findings that he is alleged to convert customer funds and sold private securities offerings away from LPL Financial LLC without the firm’s knowledge or approval. According to a release by the Department of Justice in April 2016, Fackrell pled guilty to securities fraud and he was sentenced to five years in prison. Fackrell solicited $1.4 million from at least 20 investors in a Ponzi scheme involving investments with Robin Hood, LLC,” “Robinhood LLC,” “Robin Hood Holdings, LLC,” “Robinhood Holdings, LLC” and related entities, all of which were entities that Fackrell controlled and had access to the funds. Fackrell misled investors into believing that the Robin Hood investments were safe and secured by gold and other precious metals, with a guaranteed annual return of 5 to 7%. Also instead of investing the funds, Fackrell used most of the funds for personal use, including medical bills, groceries, hotel expenses, shopping sprees and to make large cash withdrawals. Fackrell also used a portion of the money to make “interest” payments to some investors who demanded their money back by generating further investments from the other existing investors. Fackrell was able to divert about half of the money he received from investors to other investors, continuing the Ponzi scheme.
Fackrell has been the subject of 11 customer complaints between 2014 and 2016, three of which were closed without action, according to his CRD report:
November 2016. “Claimants allege selling away, forgery, unsuitability and misrepresentation. Activity period June 2010 to December 2014.” The case is currently pending.
June 2016. “Claimants allege unsuitability, misrepresentation, excessive and unauthorized trading, and use of client funds for his personal benefit. Activity period August 2010 to December 2014.” The case was settled for $60,000.
March 2016. “Claimants alleges selling away, unsuitability and misrepresentation. Activity period June 2010 to December 2014.” The case is currently pending.
February 2016. “Claimants allege selling away, forgery, unsuitability and misrepresentation. Activity period June 2010 to December 2014.” The case is currently pending.
January 2016. “Claimant alleges unauthorized trading and unsuitability of investments.” The case was settled for $18,500.
August 2015. “Claimants allege unsuitable investments and misrepresentation. Also allege that the fa placed them in investments that are unapproved by lpl which they believe were illegitimate.” The case is currently pending.
July 2015. “Claimants allege unsuitable investments and misrepresentation. Also allege misappropriation of funds through transactions not made through or approved by LPL.” The customer was awarded $119,177 in damages.
June 2015. “Violation of securities regulatory requirements; breach of fiduciary duties; violation of the Washington State Securities Act and the Utah Uniform Securities Act; negligence; negligent supervision; violation of the Washington Consumer Protection Act.” The case was settled for $67,966.46.”
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, LPL Financial LLC may be liable for investment or other losses suffered by Fackrell’s customers.
Erez Law represents investors in the United States for claims against LPL Financial LLC financial advisor Charles Fackrell, regarding securities fraud and involvement in a $1.4 million Ponzi scheme. If you were a client of LPL Financial LLC or another firm, 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.