David McFadden, a former broker for Securities America, has been sentenced to five years in prison for running a securities fraud scheme that cost at least 150 clients – many of whom were retired or living on a fixed income – tens of millions of dollars in losses.
McFadden headed a company called Diversified Financial Services and was a registered representative for Securities America. And while he touted himself as a certified public accountant, he neglected to tell clients that he hadn’t been a licensed CPA for more than two decades.
Most of McFadden’s victims were solicited via seminars that he held for longtime Exxon-Mobil employees. According to court documents, McFadden convinced investors to make early withdrawals from their retirement accounts and then deposit the money into stock accounts and/or risky securities. McFadden, meanwhile, would make commissions on the purchases, even though he knew such investments were unsuitable for those approaching retirement.
McFadden pled guilty on May 27, 2009, admitting that he conspired with others to commit a securities fraud scheme by falsely promoting his qualifications and credentials as a CPA and financial planner to obtain clients.
“He lied to them and told them they were going to have their nest eggs for the rest of their lives,” said Assistant U.S. Attorney Dorothy Manning Taylor.
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