The Securities and Exchange Commission has alleged in court that the late Kenneth Wayne Mcleod engaged in a long-running Ponzi scheme that targeted and defrauded active and retired Federal Employees. The core of the alleged fraud involved McLeod’s sale of the FEBG Bond Fund, which he touted as a safe and conservative investment that would consistently produce 8-10% returns.
In truth, as the SEC claims, the FEBG Bond Fund did not exist and McLeod never purchased government securities with investor funds. Instead, in a class Ponzi scheme fashion, McLeod used the funds to prop-up his investment adviser business and to support his extravagant personal lifestyle, the SEC contends. It is believed that McLeod raised in excess of $34 million from over 260 investors across the country.
Unfortunately, in these types of frauds, very little is left for investors after the Ponzi scheme is exposed and the authorities become involved. In this case, however, McLeod was a registered securities representative and associated with certain registered securities brokerage firms while he engaged in the alleged fraud. As a result, those brokerage firms had an obligation under the law to reasonably supervise McLeod’s activities and may be legally responsible for investor losses caused by McLeod’s fraudulent activities.
The Law Firm of David R. Chase, P.A., headed by former SEC Prosecutor David R. Chase, has been retained to represent McLeod victims against Lincoln Financial Securities Corporation, one of the securities brokerage firms with which McLeod was associated from approximately January 2008 through May 2009. The arbitration claim alleges that Lincoln Financial is liable for investor losses because: (1) it failed to reasonably supervise McLeod’s activities, (2) it is legally responsible for McLeod’s fraudulent conduct under the doctrine of respondeat superior, and (3) it is legally responsible for McLeod’s wrongful acts under Florida Administrative Code 69W-600.008(5). The arbitration claim seeks full recovery of the investment loss sustained in the FEBG Bond Fund, prejudgment interest, costs of the arbitration and punitive damages.
The arbitration claim was filed with FINRA. These cases typically take approximately 1 year from filing to be heard, and are designed to be more efficient and less expensive than court.
My law firm is filing only individual claims, not group claims. Individually filed claims have the benefit of ensuring that the unique and individual facts about the particular investor are highlighted, and are not lost amongst multiple claimant investors. Individual claims, unlike group claims, also allow the investor greater control (and avoid potential complicated conflicts) over the decision of whether the case should settle and, if so, for how much. While there are certain cost efficiencies with a group claim, given the relatively low costs involved in the arbitration process, those efficiencies are likely outweighed by the more significant benefits of control over the process and ensuring that the case is focused only on your individual facts and situation.
I have many years of experience in handling Ponzi scheme cases. I civilly prosecuted Ponzi schemes when I worked for the Securities and Exchange Commission in its Division of Enforcement, and criminally prosecuted them as a Special Assistant United States Attorney in the Southern District of Florida. I have also served as Court- appointed Receiver in several SEC and Federal Trade Commission fraud cases. For the last decade, I have represented defrauded investors across the nation against securities brokerage firms in cases to recover investment losses.
If you have lost money in the FEBG Bond Fund through Wayne McLeod, do not hesitate to contact me for a confidential, no obligation review of your potential case. I can be reached toll free at: 888-337-8625 or at my e-mail: david@davidchaselaw.com.
