In June 2013, FINRA announced its suspension of Lynn Alan Simon of Newburgh, Indiana, a former registered representative in CFD Securities’ Kokomo, Indiana office Simon had operated two Evansville, Indiana businesses as its sole owner under the names Financial Security Planning and The Insurance Shoppe.
FINRA suspended Simon for “selling away” from CFD Securities – i.e., for selling securities that were not approved by CFD Securities.
Things only went downhill from there for Simon. In September 2013, Simon was arrested for allegedly bilking more than $1 million from at least a dozen local investors. He currently faces three counts of securities fraud, Class B felonies, and a charge of unlawful sale of a security, a Class C felony.
Simon’s fraud began to come to light in April 2013 when his wife contacted the Sheriff’s office after he went missing for two days. Two weeks later, an Evansville-based client of Simon, filed a complaint with the Indiana’s Secretary of State after he had stopped receiving interest payments on an investment that he had made with Simon. Simon remained missing until September 2013, at which time the authorities tracked him down and arrested him.
Court documents reveal that numerous elderly clients lost money through Simon’s “investments.” Clients were apparently promised high rates of returns on their investments–as high as 11%. Simon allegedly presented typewritten promissory notes to his customers, showing a rate of return and a maturity date.
In typical Ponzi scheme fashion, Simon apparently used money from new customers to pay interest and principal to old customers while misappropriating a great deal of customer money.
It is possible for Simon’s victims to recover their losses from CFD Securities by pursuing a case in either court or in arbitration at FINRA Dispute Resolution. Securities industry rules required CFD Securities to adequately supervise Simon and it appears that CFD Securities failed in this respect. CFD Securities may also be liable to Simon’s victims as a “controlling person” under the Indiana Securities Act.
Blau & Malmfeldt invites Simon’s customers to contact us at 312-443-1600 for a complimentary case evaluation. Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.