The Securities and Exchange Commission charged a former Raymond James advisor with fraud. In 2019, two of advisor Frederick Stow’s clients filed complaints that he was misappropriating their funds.
Stow was a securities broker for a World War II veteran for more than 30 years, according to the SEC’s complaint. Over time, Stow became embedded in the client’s personal life and other financial affairs. The fraud started in October 2015 with the veteran’s individual retirement account. The SEC says Stow made 74 total transfers from the client’s IRA to his own bank account through forging wire transfer letters of authorization.
The elderly client passed away in 2018 and Raymond James froze the client’s accounts after being notified by the executor of the estate. One year later, the complaint says Stow started the same scheme with another elderly client and a different bank account.
In May 2019, Stow admitted the scheme to Raymond James after the executor of the deceased client’s estate requested an explanation for the unfamiliar wire transfers.
Raymond James fired Stow in May 2019. A month after, one client filed a complaint against the advisor for breach of fiduciary duty and alleged damages totaling $911,500. By October, FINRA barred Stow. The SEC claims Stow stole a total of $933,500 in client funds.
“Far too often, veterans and seniors who depend on their investments for retirement income are targeted by fraudulent schemes," said Justin Jeffries, the associate regional director for the SEC's Atlanta regional office. "As alleged in our complaint, Stow took advantage of these seniors, abusing his access to their brokerage accounts to generate income for himself."
The SEC charged Stow with violations of federal antifraud laws. It seeks an injunction relief, disgorgement plus interest and a civil penalty. The U.S. Attorney’s Office for the Middle District of Tennessee has also filed criminal charges against Stow.