Woodbury, Hartford on hook in $100,000 claim after stepson steals from stepdad

Advisory firms for years have continued to be plagued by imposters seeking access to clients' accounts.

Hartford Fund Distributors and Woodbury Financial Services Inc. are on the hook for $100,000 in damages stemming from Hartford allegedly permitting an individual to impersonate a client and withdraw a large sum from a Hartford mutual fund held in a retirement account and allegedly failing to comply with investor protection requirements, according to an arbitration award issued Wednesday.

The claimant, the estate of Joseph Muff, was the target of his stepson, according to the claimant’s attorney, Gail E. Boliver, and the theft began in early 2016.

Muff was a client of Woodbury Financial Services, an independent broker-dealer owned by Advisor Group, Boliver said. The stepson was Tadd Joshua Paige, who was later arrested for theft and began serving jail time in December, Boliver said.

“It went for a year and a half before the stepson exhausted the account,” Boliver said. “That money would have grown to $684,000.”

According to the Financial Industry Regulatory Authority Inc. arbitration decision, the Muff estate alleged that Woodbury, despite having received statements from Hartford showing the large withdrawals, took no action to contact him. Joseph Muff passed away in 2018, Boliver said.

For years, firms have been plagued by imposters seeking access to clients’ accounts.

Sometimes it’s an adviser who pretends to be a client, looking to take a short cut in a transaction. At other times it’s an outsider looking to lift client funds from a financial institution that takes short cuts in transferring money, often to a foreign account.

And other times, as in this most recent matter, a family member or friend seeking to take advantage of a close relationship is the imposter.

As is customary in such Finra awards, the three arbitrators did not explain the decision.

The estate also sought damages of up to $682,000. It is common in such arbitration decision that the claimants receive a fraction of the damages they originally seek.

A spokesperson for Hartford Funds said that the firm had no comment. An Advisor Group spokesperson declined to comment.

Muff had invested in Hartford’s Core Equity Fund, which was the sole product in his SEP IRA account, according to the decision by the Finra arbitrators.