Ex-Raymond James adviser barred over $3 million Ponzi

Finra kicks out broker who allegedly stole $3 million from 13 clients

Jun 19, 2014 @ 2:37 pm

By Mason Braswell

A former Raymond James broker is in hot water and has been barred from the industry after Finra alleged he had been running a Ponzi scheme.

The Financial Industry Regulatory Authority Inc. accused Claus Foerster of stealing nearly $3 million from 13 clients since 2000.

He had solicited investments for a purported investment fund known as S.G. Investments, which was not an investment fund, but a bank account Mr. Foerster controlled, Finra said. He instructed the 13 customers to move funds from their brokerage accounts to their personal bank accounts and then write checks payable to S.G. Investments, according to the complaint.

“In furtherance of his scheme, Foerster provided some of the customers with fictitious account statements and provided at least two customer with purported dividend payments on a monthly basis,” Finra said.

Mr. Foerster signed a letter accepting Finra's punishment without admitting or denying Finra's allegations. An attorney for Mr. Foester, Andrew Mathias, did not immediately return a call requesting comment.

Mr. Foerster began his career at J.C. Bradford in New York in 1989 and was at Citigroup Global Markets Inc. in 2000 when the alleged Ponzi scheme began, according to Finra registration records. He moved to Morgan Keegan & Co. Inc. in 2008 and came to Raymond James last February by way of acquisition.

Raymond James spokeswoman Anthea Penrose said in an email that Mr. Foerster admitted to the firm that he had misappropriated funds through a “phantom private investment fund he created outside of Raymond James.”

He was subsequently terminated on June 4. She declined to elaborate on how the problem came to Raymond James' attention.

“At no time did these activities involve Raymond James, its systems or other firm personnel,” Ms. Penrose said in an emailed statement. “All deposits into the private investment came from clients' third party bank accounts, and no investments were made directly from any Raymond James accounts.”

Ms. Penrose said that the firm has already begun to make restitution to the involved clients. It was not immediately clear what, if any, additional regulatory action was pending.

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