The world of financial advisory is not without its pitfalls. One such case that starkly highlights this fact involves Anthony B. Liddle and his associated firms, Prosper Wealth Management, LLC, and LANDOLT SECURITIES, INC. (CRD 28352). This case underscores the seriousness of allegations of financial advisor malpractice, the potential repercussions for the advisor, and the impact on investors.
Understanding the Allegation and Its Seriousness
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On August 30, 2023, the Securities and Exchange Commission (“Commission”) instituted public administrative proceedings against Anthony B. Liddle, following his submission of an Offer of Settlement. The Commission’s decision was based on Liddle’s guilty plea to charges of wire fraud and money laundering before the United States District Court for the Western District of Wisconsin on January 25, 2023.
The criminal case against Liddle resulted in a judgment that included a 97-month prison term on each count, to run concurrently, a three-year term of supervised release, and the order to make restitution of $1,662,041.80. The case revealed that Liddle, as the managing member and control person of Prosper Wealth Management, LLC, had defrauded advisory clients by misusing their funds for personal expenses, debt repayment, and paying other investors and clients.
Moreover, the Wisconsin Department of Financial Institutions – Division of Securities issued a summary order on August 4, 2022, permanently barring Liddle from registration and from making further offers or sales of securities in or from Wisconsin. The order found that Liddle had solicited $1.9 million from 13 investors for the purchase of bonds, but instead used the funds for his personal expenses, without authorization.
Decoding the Allegation: The FINRA Rule
The Financial Industry Regulatory Authority (FINRA) is a non-governmental organization that regulates member brokerage firms and exchange markets in the United States. It operates under the principles of investor protection and market integrity. The FINRA Rule 8210, for instance, provides the authority with the right to require a member, associated person, or person subject to FINRA’s jurisdiction to provide information, orally, in writing, or electronically, and to testify under oath, in connection with an investigation, complaint, examination, or proceeding.
In Liddle’s case, his actions violated the principles of trust and fiduciary responsibility that underlie the financial advisory profession. His fraudulent activities led to significant financial losses for his clients and damaged the reputation of the firms he was associated with.
Why It Matters for Investors
Investors entrust their hard-earned money to financial advisors with the expectation of responsible management and growth. When advisors like Liddle misuse this trust, it can lead to significant financial losses and emotional stress for the investors. Moreover, such cases erode the faith of investors in financial institutions and advisors, potentially making them reluctant to invest in the future.
It is therefore crucial for investors to be aware of the risks involved and to be vigilant about their investments. They should also know their rights and the steps they can take if they suspect malpractice.
Red Flags for Financial Advisor Malpractice and Recovery of Losses
Some common red flags of financial advisor malpractice include unexplained losses, unauthorized trades, and a lack of transparency or communication. If you notice any of these, it might be time to seek professional advice.
Investors who have suffered losses due to financial advisor malpractice can seek recovery through FINRA Arbitration. This process can help investors recover their losses in a timely and cost-effective manner.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the advisor and company. With over 50 years of experience and a 98% success rate, the firm has successfully recovered financial losses for investors. The firm offers free consultations and operates on a “No Recovery, No Fee” policy. You can reach them at their toll-free consultation number 1-800-856-3352.
In conclusion, while the world of investing offers numerous opportunities for wealth creation, it is not without risks. Investors should remain vigilant, understand their rights, and not hesitate to seek professional help when necessary.
