Regulation And Legislation

Jailed broker Mark David Holt loses $477,000 Finra arbitration

The case is the latest setback for Mr. Holt, a former attorney who has been disbarred, thrown out of the securities industry and is currently serving a 10-year prison term.

Mark David Holt, a former broker currently in prison, has lost a $477,000 Finra arbitration decision to two former clients who had alleged he mismanaged their accounts.

The claimants, Peter Izmirian and Sandra Ingwaldson, filed their arbitration claim with the Financial Industry Regualtory Authority Inc. in March 2015 and later settled with two broker-dealers where Mr. Holt was registered, Harbour Investments and Geneos Wealth Management, according to the arbitration award. The amounts of the settlements were not stated. Most recently, Mr. Holt was not present at a hearing about the claim, “as he [was] currently incarcerated,” according to the award.

According to his BrokerCheck report, Mr. Holt, 47, in 2014 was sentenced to 10 years in jail after pleading guilty to wire fraud and is currently incarcerated at the Federal Prison Camp in Duluth, Minn.

The award includes $100,000 in punitive damages to each of the claimants.

Mr. Izmirian and Ms. Ingwaldson were an “older couple and very unsophisticated investors, almost hippie types, and Holt stole all their money,” said their attorney, Jonathan Harris.

A former attorney who has since been disbarred, Mr. Holt from 2005 to 2014 “defrauded his customers to obtain their property and money,” according to BrokerCheck. “Holt represented to his brokerage customers that he would invest their funds in investment vehicles such as bond funds and mutual funds. Instead, Holt misappropriated their funds by depositing customer checks into a bank account he controlled and used these funds to pay for personal and business expenses.”

Mr. Holt stole more than $2 million from clients, according to securities regulators. Finra barred Mr. Holt in 2014 from the securities industry.

He used his clients’ funds for personal expenses, including a membership at a yacht club, luxury cars, cross-country travel with stays at a Ritz Carlton hotel, meals at high-end restaurants, horse boarding and exotic dancers, according to a report in the Minneapolis Star Tribune.

Mr. Izmirian and Ms. Ingwaldson alleged gross negligence, violations of federal and state securities laws as well as other charges in their complaint. “The cause of action related to [their] allegations that Holt mismanaged their accounts, including the recommendation to purchase a Jackson Life Annuity, resulting in surrender costs from the liquidation of a Hartford annuity,” according to the award. They further alleged that the two broker-dealers, Geneos and Harbour “failed to properly supervise Holt, allowing Holt to steal [their] funds and provide false account statements.”

Mr. Holt could not be reached to comment. Ryan Diachok, president of Geneos, and David Genelly, an attorney for Harbour Investments, did not return calls on Tuesday afternoon to comment.