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A Chicago-based financial management firm and its lead investment adviser have been put under an emergency asset freeze and restraining order by the Securities and Exchange Commission due to allegations that the company has been defrauding elderly investors out of their money. According to the SEC, millions of dollars were taken from elderly investors.
Daniel H. Glick is the lead and sole investment adviser for Financial Management Strategies, an unregistered investment advisory business that illegally obtained monetary investments from clients he misled regarding his services. Glick and his firm supposedly gave clients account statements that had been falsified to hide the fact that Glick was using his client's money for personal expenses, including some related to his business. He allegedly also bought a new Mercedes-Benz for himself using the funds, and he paid off his own personals debts and loans. Those are just a handful of the allegations made by the SEC in terms of how Glick mishandled his client's money.
This is not the first-time Glick has had trouble with the SEC. In 2014, FINRA barred Glick from practicing in the financial sector by revoking his Certified Financial Planner distinction as well as his Certified Public Accountant license. Those decisions were made based on conduct committed by Glick that is unrelated to the current investigation by the SEC.
David Glockner, the Director the Chicago Regional Office of the SEC, alleges that Glick was able to raise millions of dollars from his elderly clients by misleading them about how he would handle their money. He claimed he would handle all their tax issues, pay their monthly expenses, and make calculated investments to earn high returns. Instead, Glick used almost all the money obtained from his clients to personally benefit himself. He had no intentions of providing any of the financial services he offered his clients.
Glick is not alone in the charges coming from the SEC. Glick Accounting Services, Glick's secondary business, is also named, as are his business partner, David B. Slagter, and another business associate, Edward H. Forte. These secondary defendants are included as relief defendants since Glick transferred large sums of his client's money to them for the purposes of loan repayment or advances on other payments. Despite having no direct involvement in the defrauding of the elderly clients of FMS, these individuals could be held liable for damages since they received substantial amounts of money obtained in an illegal manner.
At the request of the SEC, a court-ordered temporary restraining order was placed against Glick, FMS, and Glick Accounting Services, and all assets of those entities have been frozen by the same court. The SEC recommends that investors perform their due diligence before transferring any investment funds to any third party, which can help prevent fraud and theft.
There is currently an ongoing investigation by the SEC into the activities of Glick and his associates. The primary investigation is being done by John Kustusch and Michelle Muñoz Durk, and Jeffrey A. Shank is the supervisor in charge of the case. Steven C. Seeger will lead the litigation team of the SEC during the investigation and subsequent court proceedings. The investigation was deemed necessary after an initial SEC examination that was conducted by Christine Little, Terrence Bohan, and Michael Altschuler. Rosanne Smith supervised that initial examination.
By: Patrick Mansfield | U.S. Gov Connect
U.S. Gov Connect Reporting On U.S. Government Programs & Regulations