Axa Broker Charged with Running Ponzi Scheme
Dennis Wright, a former broker at Axa Advisors in Lewistown, Pa, has been charged by the Securities and Exchange Commission (SEC) with running a Ponzi scheme that bilked customers of $1.5 million.
In the 14-year-old scheme, which ran between 1998 and 2012, Wright allegedly lured about 28 customers — including childhood friends and inexperienced investors — to withdraw funds from Axa variable annuity accounts. Wright promised to transfer the money to an Axa mutual fund managed account with higher returns than the annuities.
But Wright deposited the funds into a bank account he controlled and used to pay personal expenses and reimburse customers to whom he owed money.
The SEC complaint claims that Wright set up the account specifically to lure customers into transferring funds in order to steal their savings.
According to the SEC, Axa Advisors, which has about 5,000 brokers, terminated Wright’s employment after becoming aware of the alleged fraud. Although the company was not implicated in the case, it repaid customers the money that was stolen. Axa fully cooperated with the investigation and assured investors that the Wright affair is an isolated incident.
In June 2013, the Financial Industry Regulatory Authority Inc. (FINRA) barred Wright from the industry.
The team of investment fraud lawyers at Starr Austen & Miller LLP handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence, broker churning, breach of trust, as well as malpractice.
Source: Investment News