Investors were unaware that the nest eggs they had entrusted their broker with were being used to for his personal expenses, including his gambling debts.
While working as a registered broker for Geneos Wealth Management, Inc. from 2005-2011, former broker Marc Duda, age 37, bilked more than 10 , mostly elderly, investors out of millions, possibly as much as ten million. Duda told these unsuspecting victims that he was purchasing secure investments while he was actually using their life savings to purchase a plane, a boat, a car, a motorcycle and to make mortgage payments, pay child care expenses and even to fund gambling trips to Las Vegas.
He was able to continue the fraud using the time tested ponzi technique of paying off old investors with money raised from new victims. He operated two outside businesses KAD Capital Group, LLC and Capistrano Beach Funding Corporation, where some of the stolen money was directed.
He agreed to a permanent bar from association with any FINRA member. That is the least of his concerns. He was sentenced to 78 months in prison and begins serving his time on June 22, 2012. According to Federal Law, Duda will serve a minimum of 85% of his sentence.
Brokerage firms have a duty to supervise and oversee the activities of their brokers, however it appears that Duda's firm was negligent in overseeing his activities, resulting in financial devastation for many retirees.
If you have a question about the way your brokerage account has been handled or have stock market losses that are unexplained, please contact us.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.