NYLIFE Securities listed representative, Felix Chu, is facing allegations of defrauding two customers, where the plaintiffs are asking for $5,230,000 in restitution. The Financial Industry Regulatory Authority (FINRA) has barred Felix last year. The regulator presented claims against Felix for defrauding investors, including senior citizens, by operating a Ponzi scheme around promissory notes.
According to Felix’s BrokerCheck record, Felix served with NYLIFE Securities for 24 years until 2019. In 2020, FINRA banned him after failing to cooperate in the SRO’s investigation. The probe found him violating the rules and regulations involving the sales of promissory notes.
The four customer disputes noted on Felix’s record were all related to promissory notes. These include:
5/2021: The plaintiffs in this case claim that they were coaxed into opening up a retirement account and ended up with at least $75,000 invested. They withdrew nearly $70,000 for themselves to invest in promissory notes and opened a joint bank account in the process. The claimants stated that the withdrawn money was loaned money and never paid back. They are asking for $230,000 in settlements.
4/2021: The claimant here is a senior citizen who is requesting $5 million in damages. The customer is accusing Felix of an alleged violation of the California Elder Abuse Act, misrepresentations, negligence, fraud, violation of fiduciary duty, and breach of contract.
10/2019: This plaintiff contends that she and her husband were duped into investing $350,000 in promissory notes. The couple also claimed they also wrote a $75,000 check that was supposed to be insurance. But when it was time to use the money, they found that there wasn’t any money left. This investor fraud claim was settled to the tune of $125,000.
8/2019: This is a FINRA arbitration case involving promissory note fraud. The case was settled for $250,000.
Felix Chu And His Son Derek Chu Indicted For A Ponzi-like Scam Involving Promissory Notes
Felix Chu is accused of advising customers to invest in a Ponzi scheme. The ex-NYLIFE Securities broker has earned commissions and income for himself by duping investors with his fraudulent promissory notes scheme. His son Derek, also an ex-broker at NYLIFE Securities, left the company after being implicated in this scandal.
In 2015, Derek was barred by FIRNA from working in the industry. A few months later, the NYLIFE Securities sacked him. There is a pending case against Derek from 2019 following a customer complaint involving promissory notes. The plaintiff has requested around $837,000 in damages.
The purported promissory notes related Ponzi scheme has enabled Derek to start a successful sports ticket resale venture. He marketed the business as a safe investment that would generate 15 percent in returns annually. Lured by high returns, unsuspecting investors invested in promissory notes sold by Derek.
Unfortunately, it seems that most of the investors’ money was used to pay off other people’s interest and principal payments in what could very well be considered a Ponzi scheme. The Chus are also suspected of funding their lavish lifestyles with this scheme.
Experienced FINRA Arbitration Attorneys
NYLIFE Securities is indicted for the failure of properly supervising and breaching their fiduciary duty to ensure that these promissory notes were safe and suitable investments for their customers. Haselkorn & Thibaut, P. A., offers representation to investors nationwide seeking damages from financial advisors through FINRA arbitration. We are investigating claims of losses by former investors in ex-NYLIFE Securities financial advisor/broker Felix Chu. If you are one of these investors, call 1-800-856-3352 today!