Secretary of State Jay Ashcroft’s Securities Division ordered Wilbanks Securities Inc., Aaron Wilbanks & Associates Inc. and Aaron Wilbanks to cease and desist after alleging they failed to supervise agents who defrauded and misled an elderly Missourian.
In 2010, two elderly Missouri residents, a husband and wife, were provided financial services by two Wilbanks Securities Inc. agents. Those services included formulating investment plans, implementing investment strategies, and making investment recommendations. During that time, the husband was solely responsible for making all financial decisions.
On Aug. 31, 2010, the husband passed away, leaving his wife with sole responsibility of their developmentally-disabled adult son. Over the next 20 months, the two agents advocated that the surviving spouse invest the vast majority of her funds into variable annuities. Soon after, they routinely had the surviving spouse purchase and prematurely liquidate numerous annuities and purchase an unsuitable mutual fund consisting solely of high risk municipal bonds. The agents also repeatedly recommended that the surviving spouse sell her home in order to fund the purchase of additional investments, and suggested that one of the agents become trustee of the surviving spouse’s trust and serve as guardian of her developmentally-disabled son.
“Broker-dealer firms have a duty to supervise their agents,” Securities Commissioner David M. Minnick said. “The victim in this case had just lost her husband and was approached by the two agents when she was most vulnerable, at her husband’s funeral. The agents took advantage of the situation, and it is alleged that their conduct was not appropriately supervised. If you have questions about what a financial adviser is asking you to do, our division can help better inform you about them.”
The division ordered Wilbanks and his companies to show cause why they should not be ordered to pay restitution, civil penalties and investigation costs totaling more than $213,000. The commissioner also ordered Wilbanks and his companies to show cause why they should not be subject to a censure and restrictions on their activities.
Ashcroft urges all investors to know the risks. If you have any questions about an investment opportunity or wish to check the background and registration status of a financial adviser, please call the toll-free investor protection hotline at 800-721-7996.
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