2014-01-02 / Front Page

Burnt Bard Investors Seek Compensation

Arbitration claim to be filed against brokerage firms
By Lindsay R. Mellott
STAFF WRITER

Lawyers representing investors who were bilked out of money by Warfordsburg investment advisor Robert G. Bard, 47, will seek as much as $6 million in compensation for investment losses stemming from Bard’s violation of securities laws.

Attorneys Tracy Pride Stoneman, Westcliffe, Colo., and Debra G. Speyer, Bala Cynwyd, Pa., who represent the burnt investors along with New York attorney Jonathan Neuman, told the “News” last week that they will file a joint arbitration claim with the Financial Industry Regulatory Authority (FINRA) against brokerage firms that the attorneys say made Bard’s fraud possible.

In addition to compensatory damages, the claim will ask for interest and comparative damages, punitive damages, attorneys’ fees and costs.

The arbitration claim alleges various causes of action, including violations of the Bank Secrecy and Patriot acts; negligence; breach of contract; aiding and abetting; fraud through omission of material fact; allowing illegal transfers, deposits and withdrawals; and violations of federal securities laws, Pennsylvania Securities Act, FINRA regulations, and the Pennsylvania Unfair Trade Practices and Consumer Protection Law.

Douglas J. Schulz, a securities fraud expert who is assisting the three attorneys, said that the brokerage firms doing business with Bard also failed in their due diligence because they “did not know or ignored the essential facts about the person (Bard) who had trading authority over their customers’ accounts.”

“If they had done what they were supposed to this (Bard’s fraud) probably wouldn’t have happened,” Schulz said.

Schulz is referring to Bard having been terminated as a stockbroker after the firm he worked for prior to incorporating his Warfordsburg investment firm Vision Specialist Group in December 2004 discovered that he had prepared and submitted investment documents that contained forged customer signatures. As a result, FINRA investigated and determined that Bard forged customer signatures and improperly guaranteed investment returns. In October 2005, Bard signed a letter of acceptance, waiver and consent, which barred his future association with any FINRA member.

The attorneys said last week that the brokerage firms named in the arbitration claim include Ameritrade, E-Trade, Scottrade and Choice Investments and that they plan to file the arbitration claim “very soon.”

Bard was found guilty in August 2013 of 21 felony counts of securities fraud-related offenses following a seven-day jury trial in U.S. District Court in Harrisburg. He had been accused by the U.S. Department of Justice of defrauding investors by misrepresenting and failing to fully disclose the types of investments he made for them, fabricating the performance of their accounts, and creating false account statements to conceal millions of dollars in losses his clients sustained as a result of risky and speculative investments he made in volatile securities.

The court has not yet handed down its sentence for Bard, who is facing jail time.

In February 2012 Bard was found liable for a $2.5 million civil penalty and ordered to pay back $450,000 in profits made as a result of charges of securities fraud brought against him by the U.S. Securities and Exchange Commission (SEC) in a civil suit filed in federal court in July 2009.

To date 50 to 70 accounts belonging to individuals who believe Bard cheated them out of money are included in the arbitration claim. Schulz said that the claim could potentially include hundreds of investors. However, he said, “a large group of people still believe he (Bard) didn’t do anything wrong.”

In May 2009, Bard reported managing 140 accounts totaling approximately $9 million in assets for as many as 250 clients. When the SEC filed its complaint against him later in 2009, it said he had at least $4.4 million in assets under management in 154 accounts.

According to Schulz, he and the attorneys have learned that Bard is “working against” his former clients, telling some that they don’t have any losses and others that their losses are a result of market fluctuations and not any wrongdoing on his part.

Schulz said that investment advisors accused of wrongdoing often make the market-fluctuation excuse. He went on to say that in Bard’s case this excuse “is most likely not true since Bard has been found guilty of wrongdoing and fraud” and that since “the market has doubled over the last five years” Bard’s clients “should have all their money back and more.”

“There is so much glaring truth about what he (Bard) did wrong,” Schulz said.

The attorneys and Schulz are asking that more of Bard’s former clients come forward and allow them to analyze their investment accounts, at no cost, to determine if they did lose money, how much they lost and, if they did, try to recover the money.

Schulz urges former clients who choose not to have their accounts analyzed to write down what they believe the value of the account(s) is, call the brokerage( s) firm where the account(s) is held, ask to speak with a supervisor and find out what the liquidation/ total account value is to compare it with what they believe it to be.

Former clients of Bard who are interested in being part of the arbitration claim should contact the attorneys as soon as possible. Schulz emphasized that clients of Bard who do not join the arbitration claim will not get any money they lost back if there is a settlement.

“This is not a class action suit. If you don’t join up, you won’t get anything,” Schulz said.

Attorney Speyer met with prospective claimants at the Needmore Firehall on December 3 and 9 and said that about 30 individuals attended each meeting. She and the other attorneys have asked for an expedited hearing because many of Bard’s victims are elderly, and they say the arbitration claim should be settled in a year or less.

Together, the attorneys and Schulz have 75 years of experience in securities fraud work. Stoneman and Schulz are also the authors of “Brokerage Fraud – What Wall Street Doesn’t Want You to Know.” They are providing their services to Bard’s victims on a contingency fee basis with no outof pocket costs upfront, such as filing fees, which is to be reimbursed only if money is recovered from the brokerage firms. They can be reached toll-free at 800- 510-7862 for a free, confidential consultation. Additional information about the attorneys and Schulz can be found on these Web sites: www.brokeragefraud.com www.securitiesexpert.com and www.speyerlaw.com.

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