Fishman Haygood Recovers Almost $1.6 million for Victims of Investment Fraud
March 4, 2014
John Hancock Unit Ordered to Pay Couple $1.6 Million
An arbitration panel ordered Signator Investors Inc., part of John Hancock Financial, to pay a California couple $1.6 million for losses tied to failed real-estate investments.
The Financial Industry Regulatory Authority Inc. arbitration panel agreed with Edward Blank and Doreen Baker Blank, who claimed Signator broker James Robert Glover lured them into investments that were too risky for them.
Mr. Glover put about $1 million of the couple’s money in Colonial Tidewater Realty Income Partners LLC, a real-estate firm that he said would generate a steady monthly income but suspended payments in 2012, according to the couple’s claim. He also mismanaged other investments, the couple claimed.
Mr. Glover was listed on official records as a managing member of Colonial Tidewater—a fact he had kept from the Blanks, according to their claim. The Blanks charged Signator failed to supervise Mr. Glover properly.
On Tuesday, the panel awarded the Blanks almost $1 million in compensation and almost $200,000 in interest. The panel said Mr. Glover and Signator are responsible for paying the compensation and interest, but ordered Mr. Glover to pay Signator back. The panel also ordered Signator to pay the Blanks $454,000 in attorney fees.
The Blanks are among more than 40 clients who claimed they were hurt financially by Mr. Glover. Boston-based Signator has settled 23 claims since last year for a total of $1.3 million, according to Finra’s BrokerCheck records; 14 claims are still outstanding. Most of the claims are tied to real-estate or direct investments.
Also, seven claims against Mr. Glover between 2002 and 2013 were denied by arbitration panels.
Mr. Glover joined Singator’s Timonium, Md., branch in 1998 and, according to his BrokerCheck record, he was “permitted to resign” in 2012 amid an internal investigation by his employer, which alleged he failed to disclose outside business activities and converted client funds.
Finra barred Mr. Glover from the brokerage business last year. Last month, the Securities and Exchange Commission said he violated securities laws related to his work with the real-estate firm when he offered and sold shares in Colonial Tidewater to about 100 investors between 2001 and 2012. The agency also barred him from the industry.
Mr. Glover didn’t admit to the SEC and Finra findings but agreed to being barred, according to the regulators’ documents. He denied the Blanks’ allegations, according to the arbitration records. He couldn’t be reached for further comment.
Singator, which is owned by the insurance and mutual-fund management company John Hancock, has itself 11 regulatory events listed on its BrokerCheck records. John Hancock, which is part of Manulife Financial Corp. (MFC) of Toronto, didn’t return calls for comment. Mr. Glover found many of his clients through his affiliation with The Church of Jesus Christ of Latter-day Saints, according to the Blanks’ lawyer Lance McCardle, a partner with Fishman Haygood Phelps Walmsley Willis & Swanson LLP in New Orleans.
The Blanks too met Mr. Glover through the church, and he assured them and Ms. Baker Blank’s mother that he could safely invest their money in funds that would provide income, according to their claim. After he departed from Signator, the firm told the Blanks that their real-estate investment “never has been reviewed or approved for sale by Signator,” the claim said.
Mr. McCardle said Signator’s supervision of Mr. Glover “was grossly inadequate.” The firm argued in the arbitration hearings that they didn’t know what Mr. Glover was up to, he said.
Mr. Glover sold real-estate investments for all the 14 years he worked for Signator and without regard to investor’s risk tolerance until an SEC audit in 2012, Mr. McCardle said.
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