Investor Alert - Former New Jersey Broker has License Revoked for Thefts of Funds From Elderly Couple
Michael Alan Siegel of Livingston, NJ had his securities license revoked by the New Jersey Securities Bureau in February 2018 for the theft of funds from and the financial abuse of an elderly couple from Livingston he had befriended. He had been barred by FINRA in July 2016 for failing to respond to FINRA regulatory inquiries.
In addition, according to his BrokerCheck report, he has settled one customer arbitration for $250,000 and has two arbitrations pending.
Siegel entered the securities industry in 1989. He most recently worked at Concorde Investment Services and Concorde Asset Management in Parsippany from September 2013 until April 2014. He then worked at National Securities Corp. in Edison from April 2014 until May 2016.
He founded NJIL Advisors, LLC in Parsippany in 2013. He is the sole owner and director of the company which purportedly sells annuities and other insurance products.
Siegel knew the wife, age 81, professionally since 2009. In 2013, the wife introduced Siegel to her husband, who was 86. Siegel began spending a significant amount of time at the couple’s home, watching news shows about the stock market with the husband. The wife hired Siegel in July 2013 to drive their son, who was suffering from cancer, to and from his cancer treatments. The son died shortly thereafter.
Siegel then began to discuss trading option contracts with the couple. He told them he could trade for them through an institutional account for a 10% commission. The husband would write out personal checks payable to Siegel to fund the trading. At the end of 2014, the husband’s health waned and he could no longer communicate. The wife then began to write the checks payable to Siegel.
Siegel never provided the couple with any statements for this account. Instead, he would make notes on yellow sheets of paper that purported to memorialize the trades he was entering on their behalf.
Of course, according to the regulators, Siegel never opened any trading account on behalf of the couple.
The husband died in 2015 and the wife became almost totally dependent on Siegel. Siegel had control over her bank accounts, email and Internet passwords.
From July 2013 until January 2016 the couple wrote 57 checks totaling $280,000 to Siegel. He deposited the checks in his personal bank accounts or accounts at NJIL. He used the couple’s funds for cash withdrawals, retail purchases, home improvements, restaurants and his daughter’s rent, among other things.
Siegel also had the wife open a separate trading account at Interactive Brokers, depositing $50,000. That account was to be managed by Kroneberg Capital Partners, an investment advisor. However, Siegel did not inform his then employer, National Securities, that Siegel received a $1,300 referral fee from the advisor, contrary to the employer’s compliance policies.
He also convinced the couple to transfer their existing brokerage account to him when he worked at Concorde and National Securities.
Lastly, the couple leased a Cadillac SUV for use by Siegel and made three loans to him totaling $21,400. Siegel did not report the gift of the car lease or receipt of the loans to his then employer, as required.
This is a very disturbing case of elder fraud. Siegel was able to insert himself into the lives of this couple and then assume an even more magnified role when the husband died. The fact that there was arbitrations filed against him show that his nefarious activity was probably not limited to the one elderly couple (although two of the arbitrations appear to be related and may have been filed by the wife and the husband’s estate). This case points to the necessity of senior citizens and their families to be vigilant in their financial dealings.
If you have any questions or concerns concerning the handling of your accounts, or those of an elderly relative, contact the experienced securities attorneys at Lubiner, Schmidt & Palumbo for a free consultation.