Steven B. Heinz, of Provo, Utah, a registered stockbroker of Ogilvie Security Advisors Corp. was charged by the United States Securities and Exchange Commission for multiple violations of federal securities laws.
According to the SEC, beginning in January 2012, during his association with Ogilvie Security Advisors Corp., Heinz provided investment advice and offered and sold investment contracts to his customers, which included his church associates, family members, and friends.
As part of his scheme, Heinz is alleged to have told potential investors that his trading strategy was so successful with his personal funds that he was willing to assist a select group with their investments, and as a stockbroker advised individuals to liquidate their securities holdings and instead invest the funds with him.
Heinz also promised some investors that they would earn tax-free income if they provided a loan to Heinz to invest for them.
One of Heinz’s victims, the recent widow of a church associate of Heinz, invested with Heinz after he volunteered to assist her with her finances and investments after her spouse died.
In another instance, Heinz explained to a couple, who had been Heinz’s clients when he was associated with Ogilvie Security, that Ogilvie Security no longer allowed him to sell the securities the couple owned. So, Heinz promised the couple that by investing with Heinz he
Heinz convinced the elderly couple to liquidate their investments and invest those funds with him personally. Heinz did not disclose to the couple that they would incur $45,000 in penalties as a result of early liquidation of their investments.
Heinz provided written investment contracts to investors, which specified a guaranteed rate of return. The investment contracts, which are between Heinz and the investor, are a one page document which states the amount invested and the guaranteed rate of return.
While Heinz did use a portion of investor funds to purchase crude oil futures contracts, among other types of futures contracts, bank records show that Heinz misappropriated approximately $1 million in investors’ funds for personal purposes, such as the payment of his personal credit cards in the amount of $331,000, household expenses, and personal travel. Heinz also used investor funds to repay a $600,000 loan he incurred against his personal life insurance policy more than a decade earlier.
Heinz Long History of Customer Complaints
Heinz, who “resigned” from Ogilvie Security Advisors in October 2012, has a long history of customer complaints, regulatory actions and even a termination for cause from a prior brokerage firm long before he was even hired by Ogilvie Security Advisors Corp.
Firm’s Duty to Supervise
Ogilvie Security Advisors has an absolute duty to supervise his activities during the course of his registration or association with them as a licensed stockbroker. Accordingly, Ogilvie Security Advisors may be held responsible for his conduct based upon the failure to supervise, and as a control pursuant to Section 20(a) of the Exchange Act of 1934, 15 U.S.C. § 78t.
Customers purchasing these unregistered securities from Heinz, ought to have their investment accounts reviewed by a professional to determine if they have been the victim of the fraud and may have the opportunity to seek recovery from Ogilvie Security Advisors.
Guiliano Law Group
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