The Financial Industry Regulatory Authority (FINRA) has filed a complaint against Charles Duane Lewis, a broker with H.D. Vest Investment Services who misappropriated more than $500,000 from an elderly customer.
The complaint, filed by FINRA’s Department of Enforcement on June 25, states that Lewis misappropriated the money between December 2007 and May 2010 from an elderly customer in her mid to late 80s identified only as DS. Lewis also failed to respond FINRA’s requests for documents and information.
Lewis Charged with 58 Felony Counts
In late summer 2010, Lewis was charged with 58 felony counts in the Superior Court of the County of San Diego, Calif. The charges included one count of theft of more than $950 from an elder, one count of fraudulent appropriation by a clerk, agent or employee, one count of the use of personal identifying information of another person, and 55 counts of forgery, the complaint said.
In November 2010, Lewis pleaded guilty and was convicted of theft from an elder in violation of California Penal Code § 368(d), and fraudulent appropriation of funds in violation of California Penal Code § 508. The court dismissed the remaining felony counts in exchange for the guilty plea, the complaint said.
H.D. Vest Investment
Lewis worked for H.D. Vest Investment, a FINRA member, from 1999 to July 2010. He was registered as an investment company products/variable contracts representative. For a complete disciplinary history, see FINRA public disclosure records.
Although the firm terminated its association with Lewis, FINRA retains jurisdiction because the complaint was filed within two years of the termination.
The FINRA Complaint
According to the complaint, Lewis provided accounting and financial services to DS through his company, Fletcher Hills Tax Service. He obtained a power of attorney from DS, and then wrote 61 checks on DS’s bank account to himself or his company without her knowledge or consent.
In total, Lewis misappropriated $550,496 from DS to use for his own purposes, including $83,319 that went to a personal friend, the complaint said.
This misconduct violated National Association of Securities Dealers (NASD) Rule 2330(a) concerning customer funds and Rule 2110 addressing equitable principles of trade, as well as FINRA Rule 2150 regarding improper use of customer funds and Rule 2010 concerning standards of commercial honor and principles of trade.
In addition, Lewis failed to respond to two FINRA requests for documents and information in violation of FINRA Rule 8210 on provision of information and testimony.
The complaint is seeking sanctions, including full disgorgement of any and all ill gotten gains, full and complete restitution plus interest, and for Lewis to bear the costs of the proceeding as appropriate.
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