Tag Archives: Minnesota Fraud

John Henry Swon IV

If you were an investor with John Henry Swon IV and suspect irregularities in your portfolio please call 303-300-5022.   Consultations are free and confidential.

Swon was previously a broker with Royal Alliance and Focus Financial.  In July 2021 the Financial Industry Regulatory Authority (FINRA) the regulator, under the oversight of the SEC, banned Swon from the securities industry.  Swon consented to the underlying allegation that he misappropriated funds from the account of an investor.

The settlement was entered into after Swon refused to produce documents in defense of his actions.  The ban prevents Swon from ever working in the securities industry in the future.

In June 2021, the employers of Swon, Royal Alliance and Focus, each terminated Swon for inappropriate outside business activity.  Brokers are required to disclose all outside business activity to their brokerage firms.  This allows the brokerage firms to supervise those outside business activities.  The violation of this requirement is often referred to as “selling away.”

The “selling away” rule is very important.  The trappings of being affiliated with a brokerage firm gives legitimacy to the investments that the broker sells.  Often brokers will use this to their advantage and sell investments that are not approved by their brokerage.  The brokers will sell fake investments or unstable investments where they are paid high commissions but no brokerage firm has investigated the financials.  Many Ponzi-type scams start with a licensed securities broker “selling away” the investment to those believing the investment had been approved by a brokerage.

 

Attention Stokesbary Investors

If you were one of the investors of Arlyn Roy Stokesbary, formerly of Thrivent Investment Management, please call 303-300-5022.   Initial consultations with an attorney are free and confidential.

The Financial Industry Regulatory Authority (FINRA) accused Stokesbary of a large number of unauthorized trades in the accounts of his investors.  FINRA is the regulatory arm of the New York Stock Exchange and the NASDAQ, and is overseen by the SEC.  FINRA alleged that Stokesbary took such fraudulent actions in the accounts of 20 separate investors.   The actual number may be much higher.

In August 2017, Thrivent identified Stokebary trading for two unrelated investors within several minutes of each other, actions which raise a red flag that appropriate authorization was not obtained.  Stokesbary confessed to his employer, Thrivent, that he did not speak to either customer prior to the trades.  Thrivent warned him of the need for contemporaneous authorization of trades, but did not fire him at the time.

Unauthorized trading is a form of fraud.  A broker can enrich himself at the expense of his investor when the broker makes unauthorized trades.  As such, a broker cannot exercise such control over an account absent written authorization.

Unfortunately, the warning from Thrivent was not heeded.  FINRA identifies that shortly thereafter, Stokesbary effected an additional 109 trades without contacting investors on the day of the trade.  Once again, this number may be much higher.

On September 20, 2018, Thrivent disclosed that it  terminated the employment of Stokesbary.  Thrivent stated the termination was for his  “failing to discontinue improper trading practices [in customer accounts] after being educated.”

Thrivent, and its predecessor Lutheran Brotherhood had been the employer of Stokesbary since 1987.

FINRA suspended Stokesbary for 15 days from the industry and imposed a $5000 fine.

Investors holding accounts at Thrivent should contact an attorney if they believe that Stokesbary effectuated trades in their accounts.