Smith Barney

Claus Foerster, an ex-broker from South Carolina, was indicted by a grand jury for bilking customers out of $2.8 million during a fourteen-year span. Foerster operated his scheme from 2000 to 2014 while working as a financial advisor at Smith Barney & Co., Morgan Keegan & Co. and Raymond James Financial Inc., according to an indictment in the U.S. District Court in Spartanburg, South Carolina. The allegations stem from FINRA's 2014 decision to bar Foerster from the securities industry for operating a Ponzi scheme. Foerster would tell customers that he had an "excellent investment" for them at SG Investments, a fictional company that Foerster claimed would provide higher returns than the brokerage firms that employed him, according to the indictment. After clients agreed to the investment, Foerster then told them to take out money from their brokerage accounts and put it into their personal banking accounts. Deposits were then transferred to him in the form of checks. Foerster kept the [...]