A Kansas-based registered investment adviser allegedly funneled retirees' savings into a single speculative penny stock, wiping out hundreds of thousands in retirement assets.
James and Gail Lakatos, a married couple in their seventies, and Lisa Gates, 63, have filed a federal lawsuit against Cornerstone Securities LLC and its chief executive Russell Edward Fieger, seeking at least $400,000 in damages.
The lawsuit, filed in the United States District Court for the Middle District of Florida, alleges the advisory firm breached its fiduciary duties by overconcentrating the plaintiffs' retirement accounts in shares of Predictive Oncology Inc., a volatile microcap stock trading under the ticker POAI.
According to the filing, the firm's former registered representative Christopher Burch liquidated income-generating positions in the plaintiffs' accounts and redirected virtually all their assets into POAI between 2021 and 2022. The lawsuit claims James Lakatos's IRA held 94 percent of its stock allocation in POAI, while a joint account was allegedly 96 percent concentrated in the single position.
The filing paints a stark picture of the losses that followed. By December 2024, the joint account had allegedly lost $212,413 tied to POAI. James Lakatos's IRA and Roth IRA accounts reportedly suffered combined losses exceeding $81,000.
Burch allegedly targeted elderly investors through direct mail marketing and free dinner events, where he pitched his services as fiduciary and "risk mitigation-oriented." The lawsuit states his promotional materials indicated that advisory services were offered through Cornerstone Securities.
The firm and Fieger, who serves as both CEO and chief compliance officer, allegedly failed to conduct suitability analyses or supervise Burch's management of client accounts. The filing claims they ignored red flags about POAI, including the issuer's own disclosures warning of extreme volatility, repeated reverse stock splits to avoid delisting, and a history of net losses since inception.
James Lakatos is legally blind, and both he and his wife rely on pensions, Social Security, and personal savings for living expenses. The lawsuit invokes Florida statutes protecting adults 65 and older from financial exploitation, alleging the defendants subjected the Lakatos plaintiffs to deceptive practices and unsuitable recommendations.
The lawsuit brings claims for breach of fiduciary duty, negligence, breach of contract, and violations of the Florida Securities and Investor Protection Act, the Florida Adult Protective Services Act, and the Florida Deceptive and Unfair Trade Practices Act.
Cornerstone Securities is headquartered in Overland Park, Kansas, and has been registered to conduct business in Florida since December 2018. Burch was employed by the firm from November 2018 until March 2024.
No determination on the merits has been made. The defendants have not yet responded to the allegations.
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