On July 1, 2015 the Securities and Exchange Commission filed a complaint accusing former registered representative Malcolm Segal of operating a ponzi scheme that raised over $15 million by selling fake certificates of deposit.
According to the complaint filed by the SEC Segal began the scheme in 2009 by purchasing numerous CDs and instead of returning those proceeds to the investors, Segal used the funds for personal expenses, including a house in South Florida, and to make outsized ponzi like “interest” payments to his investors.
In 2011, Malcolm Segal changed brokerage firms and began soliciting investors to purchase fake CDs. Segal represented that his brokerage firm Aegis Capital sponsored the CD program. To entice new investors, Segal increased the interest rates to 12% annually. By 2013, with investors seeking return of their principal, Segal ran out of new investors to fund the ponzi, and it collapsed. Before it did, the SEC alleges that Malcolm Segal began misappropriating funds from his customers’ accounts.
Malcolm Segal’s registration and disciplinary history
Malcolm Segal was registered with the following firms
According to FINRA’s CRD disclosure report, Malcolm Segal has been the subject of seven customer complaints and one regulatory investigation.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery and our securities attorneys have successfully resolved over 1000 investment loss cases over the past 20 years. Recoveries for clients top $40 million. The types of claims we have successfully handled include those involving unsuitable investments (suitability claims), excessive trading or “churning”, misrepresentations and omissions, unauthorized trading, over-concentration of illiquid or overly risky investments, pump and dump scams involving “penny stocks”, direct participation programs (private placements) involving real estate investment trusts (REITS), oil and gas exploration programs, leasing equipment deals and receivable financing, promissory notes whether sold through a broker dealer or as part of the outside business activities of a registered representative, ponzi scheme losses, failure on the part of the broker dealer to perform due diligence, state securities law (blue sky) violations and failure to supervise.
Investment losses can be recovered through a process known as FINRA arbitration. FINRA regulates broker dealers that sell investments, and provides an arbitration forum to resolve investor disputes. Investors can pursue claims against their brokerage firms in the FINRA arbitration forum. Common claims in the forum are those for suitability, breach of fiduciary duty, misrepresentations and omissions, negligence, violation of FINRA rules, state and federal securities laws violations, elder abuse, breach of contract and failure to supervise. On average, the recovery process takes approximately a year, from start to finish.
FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).
If you have suffered investment losses please call The Law Office of David Liebrader at (702) 380-3131 for a free, confidential consultation