Ex-Next Financial broker faces police investigation for $1.5M theft from elderly Texas couple

Jeremy McGilvrey was fired from the firm for 'borrowing money from a client,' according to Finra

Aug 5, 2009 @ 2:38 pm

By Bruce Kelly

A broker booted from Next Financial is under investigation by the police in San Antonio for his role in an alleged theft of about $1.5 million from an elderly couple.

The broker, Jeremy McGilvrey, was fired from Next Financial Group Inc. of Houston in May for “borrowing money from a client,” according to records with the Financial Industry Regulatory Authority Inc. of Washington and New York. Having such a relationship with a client is a significant violation in the brokerage industry.

Mr. McGilvrey has not been arrested, but the police are investigating the matter as are local securities regulators, said Cliff Herberg, first assistant district attorney for the Bexar County District Attorney's Office in Texas.

“The state securities board has interviewed him once,” Mr. Herberg said.

Repeated calls to Mr. McGilvrey's firm, Hill Country Wealth Inc. in San Antonio, went unanswered.

Mr. McGilvrey is also being sued by the couple — Thomas H. Crouch, 93, and his wife, Dorothy, 89 — from whom he allegedly stole the $1.5 million. Mr. Crouch suffers from severe Alzheimer's and dementia, and Mrs. Crouch is being treated for depression and memory loss.

"These guys were grabbing money with both hands," said the couple's son James Crouch, who is an attorney in Houston. The alleged theft has three parts, he said: a $500,000 loan from the couple to Mr. McGilvrey and his firm, the couple's $500,000 purchase of stock in Hill Country and $500,000 that is simply missing.

James Crouch alleged that his parents were also overcharged fees of $130,000.

He became guardian for his father and stepmother in March, and he became suspicious of Mr. McGilvrey around that time and worked to uncover the alleged fraud.

On behalf of his parents, James Crouch filed a lawsuit against Mr. McGilvrey last week in Bexar County Probate Court in San Antonio. The suit also names Hill Country Wealth and other Hill Country executives.

James Crouch said an amended complaint could be filed this week that would include Next Financial, and he is also working to determine whether to sue LPL Financial of Boston, where Mr. McGilvrey was affiliated before joining Next in June 2008. Other clients of Mr. McGilvrey have contacted him about the matter, James Crouch said.

According to Finra records, Mr. McGilvrey was “permitted to resign” from LPL last year after he failed to supervise properly a registered rep and for not reporting a business transaction.

Executives with Next Financial did not return calls for comment, and a spokesman for LPL declined to comment.

Next Financial recently has had problems with securities regulators as well as deals that have gone afoul.

Last month, Finra fined Next Financial $1 million for failures to supervise its network of some 130 branch managers, also known as Office of Supervisory Jurisdiction in the independent-contractor-broker-dealer industry.

Next Financial was also one of a number of independent broker-dealers with advisers selling private securities of an oil and gas partnership, Provident Asset Management LLC of Dallas, that the SEC charged last month with committing a $485 million fraud.

Mr. McGilvrey is a person of some note in San Antonio. According to a report in the San Antonio Express-News on Sunday, he was the featured “financial planning expert” on the website of WOAI News 4, a local television and radio station.

He also has appeared regularly in advertisements for Hill Country Wealth, the paper said. According to filings with Texas securities regulators, HCW Asset Management LLC of San Antonio, has no client assets.


What do you think?

View comments

Recommended for you

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Upcoming Event

Oct 22


San Francisco Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in six cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video


Why millennial demand for ESG is falling on deaf ears

Editorial director Fred Gabriel and senior columnist Jeff Benjamin say there's a disconnect between the big appetite for environmental, social and governance funds in 401(k) plans and their offering.

Latest news & opinion

ESG options scarce in 401(k) plans

There's growing interest among plan participants, but reluctance to add funds that take into account environmental, social and governance factors persists.

Envestnet acquires MoneyGuide for $500 million

Deal will allow Envestnet to deepen integrations between MoneyGuide and its other wealth management solutions.

Genworth move could signal big shift in distribution of long-term-care insurance

Insurers may turn to direct-to-consumer sales only, bypassing brokers and insurance agents.

Morgan Stanley threatens to pull out of Nevada over state's fiduciary rule

Wirehouse says it would not be able to work there under state's current proposal.

Advisers see college admissions scandal as tip of the iceberg

Parents' conduct is described as 'disgusting' but not surprising given the current state of higher education.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print