A former Cetera registered rep liquidated and stole about $2.4 million of an elderly brokerage customer’s securities holdings, according to charges filed by the Securities and Exchange Commission.
The commission accused Clarice Saw of fraud in U.S. federal court in New York, tying the allegations to her alleged conduct between December 2021 and March 2022.
Though the firm isn’t named in the complaint, Saw worked with Cetera during this time period, according to her BrokerCheck profile. Saw worked with a wide array of firms since entering the industry in 1996, including multi-year stints at Metlife and LPL Financial.
Saw is based out of Pleasantville, N.Y. and joined Cetera in October 2021 after a five-year stint at Citigroup; she’s currently working at Delaware-based firm Coastal Equities, according to BrokerCheck. FINRA recently charged a former Coastal rep with convincing clients to invest more than $2 million in illiquid alt investments and falsifying information about their risk tolerance.
In October 2020, when Saw was still at Citigroup, an 87-year-old former janitor (who’s unnamed in the filing) opened a brokerage account and became a client of Saw’s, according to the SEC.
This customer’s wife died in 2015, and he was the beneficiary of her life insurance policy, valued at about $1.8 million. He had no immediate living family members. Though the customer did not speak or read English, Saw spoke his native language, which was not detailed in the SEC filing.
Saw did not respond to requests for comment prior to publication.
After becoming his rep, Saw began ingratiating herself into his life, including bringing him to medical appointments, and in late 2020, suggested he appoint Saw as his healthcare agent.
The client agreed, and Saw drafted a document (entirely in English), and had the client sign it, telling him it was a healthcare proxy, when in reality it was a general power-of-attorney making Saw the client’s agent.
In September 2021, Saw moved to Cetera, and convinced the elderly client to transfer his brokerage account to the firm. According to Cetera rules, Saw needed to get the firm’s authorization to act as the client’s power of attorney, which she didn’t do, the SEC argued.
In November 2021, the client was severely injured and hospitalized for several weeks, and was then transferred to a nursing home until July 6 of the following year. Saw learned of the injuries, and knew the client had a bank account in their own name at TD Bank.
In December 2021 (while the client was still hospitalized), Saw used her power-of-attorney to become a joint owner of the TD account, without the client’s knowledge. At the same time, Saw opened a new account at TD Bank, naming herself as the primary owner with the client as a co-owner.
Several weeks later, Saw posted a message on the client’s Cetera brokerage account, saying that due to his hospitalization, the client “decided to fully liquidate all his positions” in the account, to transfer them in cash to a separate bank account; all of this was done behind the client’s back, according to the commission.
Saw then sold about $1.7 million of the securities and transferred the earnings into the client’s TD account, and then moved the funds into the TD account she owned the following day. Several days later, Saw followed the same process with the remaining $730,000 in the client’s brokerage account, according to the SEC. Afterward, Saw transferred all the funds in her TD account co-owned by the client to a number of other bank and brokerage accounts she owned.
Eventually, she used some of the client’s funds to pay for personal expenses, including car and mortgage payments, made cash ATM withdrawals totaling more than $46,000, and bought numerous securities for herself, the SEC stated.
According to the SEC filing, the commission is looking for injunctive relief, disgorgement and civil penalties and is asking for a jury trial.