John Greg Schmidt of Dayton Ohio a stockbroker formerly associated with Wells Fargo Advisors Financial Network LLC has been barred by Securities and Exchange Commission (SEC) from being a stockbroker or investment adviser or otherwise associating with securities broker dealers or investment advisories according to an Order Instituting Administrative Proceedings based upon allegations of Schmidt defrauding elderly investors. In the Matter of John Gregory Schmidt, Administrative Proceeding File No. 3-19025 (Mar. 8, 2019).
SEC obtained a judgement against Schmidt on February 19, 2019 in which Schmidt wasfined $864,301.00 and ordered to cease and desist violating Securities Exchange Act of 1934 Section 10(b) and Securities Act of 1933 Section 17(a). Securities Exchange Commission v. John Gregory Schmidt Civil Action No. 3:18cv320 (Feb.
19, 2019).
SEC’s Complaint preceding the final judgement alleged that from 2003 to October of 2017, Schmidt misappropriated $1,160,000.00 from brokerage customers. He allegedly provided customers with bogus statements leaving customers with the impression that their account balances were higher than they really were. The Complaint alleged that customers were also provided false assurances of their returns being able to cover their withdrawals. SEC claimed that Schmidt took advantage of elderly customers who did not have financial expertise. The stockbroker allegedly accumulated commissions of $230,000.00 from affected customers.
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that Schmidt has been barred from associating with any FINRA member in any capacity based upon accusations that the stockbroker failed to respond to FINRA’s request for information about his activities when he was associated with Wells Fargo. FINRA Case No. 2017056103801 (Mar. 5, 2018).
FINRA Public Disclosure confirms that Schmidt has been identified in eight total customer initiated investment related disputes concerning accusations of his misconduct during the time that the stockbroker was employed by securities broker dealers including Wells Fargo and Stifel Nicholas.
On April 23, 2018, a customer initiated investment related complaint concerning Schmidt’s activities was resolved for $309,778.20 in damages founded on accusations that the customer’s funds were misappropriated by the stockbroker during the time that he was associated with Wells Fargo Advisors.
On December 13, 2018, another customer initiated investment related complaint pertaining to Schmidt’s conduct was settled for $850,000.00 in damages supported by allegations that withdrawals were effected without consent from the customer and that trades were facilitated in the customer’s Wells Fargo account between December 21, 2006 and October 25, 2017 in an excessive manner by the stockbroker.
Schmidt is also referenced in a customer initiated investment related complaint which was settled on December 18, 2018 for $280,000.00 in damages based upon allegations that investments were liquidated from the customer’s account by the stockbroker without the customer’s knowledge or consent and that false account statements were provided to the customer by Schmidt when he was associated with Wells Fargo.
On January 23, 2019, a customer initiated investment related complaint concerning Schmidt’s activities was resolved for $704,342.67 in damages founded on accusations that the customer’s investment funds had been misused or misappropriated by the stockbroker when he was employed by Wells Fargo causing the customer to suffer losses.
On October 24, 2017, Wells Fargo discharged Schmidt based upon allegations that money was moved between customer accounts by the stockbroker without authorization and that the stockbroker distributed account documentation to customers that was not approved by the securities broker dealer.
