SEC Charges First Allied Broker With Defrauding Two Florida Municipalities

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SEC Charges First Allied Broker With Defrauding Two Florida Municipalities

On December 31, 2009, in Investor Protection, Investors at Risk, SEC, Sales Practice Abuses, Scams, Securities Industry (general), by Investor's Watchblog

The U.S. Securities and Exchange Commission (“SEC”) has charged Harold H. Jaschke, a Houston-based stockbroker for First Allied Securities, Inc. with defrauding two Florida municipalities, which were his brokerage clients. According to the SEC, Jaschke generated commissions for himself and First Allied of more than $14 million by engaging in unauthorized trading and churning the accounts. The municipalities involved are [...]

The U.S. Securities and Exchange Commission (“SEC”) has charged Harold H. Jaschke, a Houston-based stockbroker for First Allied Securities, Inc. with defrauding two Florida municipalities, which were his brokerage clients. According to the SEC, Jaschke generated commissions for himself and First Allied of more than $14 million by engaging in unauthorized trading and churning the accounts. The municipalities involved are the City of Kissimmee, Florida, and the Tohopekaliga (Osceola County, Florida) Water Authority.

This case is a reminder that municipalities and pension funds are among the investors most at risk from a securities industry that is, at best, only incidentally interested in the customers’ welfare. Those charged with being good stewards of taxpayer money must take every precaution to protect that money from fraud and reckless brokers. When banks move cash, they hire private protection. Stewards of other peoples’ money must do likewise if they want to be equal to the peoples’ trust.