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Were You the Victim of Northwestern Mutual Investment Services, LLC Broker Scott Niekamp?

Posted on Wednesday, September 8th, 2021 at 11:47 pm    

Northwestern Mutual Investment Services

Northwestern Mutual Investment Services, LLC broker Scott Niekamp (CRD# 3277810) who faces multi-million dollar customer complaints for private unregistered securities. Niekamp was registered with Northwestern Mutual Investment Services, LLC in Chesterfield, Missouri from 2000 to 2021 and is currently suspended for three months. According to FINRA, he was sanctioned to pay a $10,000 civil and administrative penalty and fine after he “consented to the sanctions and to the entry of findings that he engaged in two outside business activities (OBA) without providing prior written notice to his member firm. The findings stated that the firm approved Niekamp’s request to participate in an OBA with a company as a passive investor and his activities would be limited to reviewing corporate documents, attending quarterly board meetings, and filing tax returns. Niekamp later updated his OBA disclosures to reflect he was no longer involved with the company. However, Niekamp engaged in other OBA on behalf of the company. Niekamp also received a 2% ownership interest in an LLC which partnered with the company on several potential projects. Niekamp did not disclose the additional OBA he conducted through the company or his membership interest and activities on behalf of the LLC. Niekamp also made false statements regarding his OBS on six compliance questionnaires. The findings also stated that Niekamp made two loans totaling $450,000 to a firm customer without notifying or obtaining prior approval from the firm. Niekamp’s firm customer and friend approached him about a possible loan to assist the customer in obtaining bank financing and covering payroll taxes for his business. Niekamp and his wife loaned the customer $250,000 via a check drawn on their joint account. Later Niekamp and his wife loaned the customer another $200,000. Niekamp also falsely stated on a compliance questionnaire that he had not loaned money to a firm customer.”

Niekamp has been the subject of four customer complaints between 2018 and 2021, according to his CRD report:

April 2021. “Customer alleges that in a series of interactions prior to February 18, 2015, the Representative misled him by recommending he invest in a private equity security and failed to disclose material facts concerning the investment, including that the Representative himself was a shareholder. Customer also alleges that the Representative made false representations about the investment that caused him to lose money, that the Representative engaged in a civil conspiracy, and that he breached a fiduciary duty to the customer by recommending an unsuitable investment.” The customer is seeking $5 million in damages and the case is currently pending. The complaint was regarding a private unregistered security. 

July 2019. “The customer alleges that in or around October 2018, the Representative did not accurately inform him of the tax consequences of transferring money from a non-qualified account to fund the purchase of a fixed annuity. The customer alleges this resulted in an unexpected tax liability.” The customer sought $50,000 in damages and the case was settled for $24,016.50. The complaint was regarding fixed annuities and mutual funds. 

February 2018. “Customer alleges that in a series of interactions prior to February 18, 2015, the Representative misled him by recommending he invest in a private equity security and failed to disclose material facts concerning the investment, including that the Representative himself was a shareholder. Customer also alleges that the Representative made false representations about the investment that caused him to lose money, that the Representative engaged in a civil conspiracy, and that he breached a fiduciary duty to the customer.” The customer is seeking $5 million in damages and the case is currently pending. 

February 2018. “Customer alleges that in or about June of 2012, the Representative misled her by recommending she invest in a private equity security and failed to disclose material facts concerning the investment, including that the Representative himself was a shareholder. Customer also alleges that the Representative made assurances regarding investment performance that caused her to lose money, and that the investment was unsuitable.” The customer sought $500,000 in damages and the case was settled for $425,600. The complaint was regarding unregistered private securities. The complaint was regarding a private unregistered security. 

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, Northwestern Mutual Investment Services, LLC may be liable for investment or other losses suffered by Niekamp’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.