Finra has barred a California broker and expelled his broker-dealer firm over allegations that he stole $4.2 million from two clients, one of whom Finra said suffers from Alzheimer's disease.
John Thornes, president of Thornes & Associates Inc. of Redlands, Calif., was barred from the industry, and his firm was expelled from Financial Industry Regulatory Authority Inc. membership.
Finra alleged that from December 2010 to January 2013, he converted customer assets in two trust accounts, using at least 50 transactions falsely characterized as loans, and transferred the money to two of his friends.
One victim was a 77-year-old retired homemaker with Alzheimer's who lived in a nursing home, Finra said in the settlement agreement.
Mr. Thornes diverted about $1.7 million from the homemaker's $2 million trust account, Finra said.
In another instance, a $3 million trust account created by a deceased friend of Mr. Thornes' parents to fund educational scholarships was depleted of $2.5 million, using the same fictitious loan scheme, Finra claimed.
None of the loans has been repaid, Finra said.
Mr. Thornes didn't respond to a call and an e-mail.
The case was settled July 18 and recently released by Finra. It isn't clear whether Mr. Thornes faces criminal charges in the matter.