OLYMPIA – The Washington State Department of Financial Institutions (DFI) Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Deny Future Registrations, Impose Fines, and Recover Costs against Rhonda Breard, a former securities salesperson who had an office in Kirkland, Wash.
DFI alleges that beginning in at least 2003 Breard began a scheme to defraud her brokerage customers. Breard recommended to customers they rollover their funds in existing investments into new investments, indicating the change would earn them more money. On Breard’s advice, the customers liquidated their existing investments and delivered the proceeds to Breard. Instead of reinvesting the customers’ moneys, Breard used the money for her own purposes. Breard’s scheme continued until February 2010 when her broker-dealer discovered the activity and terminated her as a securities salesperson. During the course of the scheme, Breard misappropriated more than $9 million from about 40 investors. Breard pleaded guilty to mail fraud in U.S. District Court in Seattle today.
“This case shows how important it is for investors to understand who is supposed to be holding their investments. It is a red flag when a securities salesperson asks a customer to write a check to anyone other than their broker-dealer,” DFI Director Scott Jarvis said. “Instructing customers to write their checks to an account that she, and not her broker-dealer controlled, allowed Ms. Breard to hide her misappropriations from her broker-dealer and her customers for years.”
Ms. Breard has a right to request a hearing on the allegations made by DFI.
Information regarding the U.S. Attorney’s Office mail fraud case against Breard will be available at www.justice.gov/usao/waw/press/2010/apr/breard.html.