More On Legal & Compliancefrom The Advisor's Professional Library
- Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times. Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
- Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
Convicted swindler Scott Rothstein, who was given a 50-year sentence for his role in devising and running a $1.2 billion Ponzi scheme, testified in a sworn deposition that employees of Toronto-Dominion Bank assisted him in the scheme, noting that they played a “critical” role.
Bloomberg reports that transcripts of the deposition, released Thursday, show Rothstein rating the assistance he got from the Canadian bank a 10 on a scale between one and 10.
“They were assisting me in putting fake balance statements into the hands of my investors,” he said, according to Bloomberg.
The news service notes that Rothstein, formerly of Rothstein Rosenfeldt Adler PA in Fort Lauderdale, Fla., “pleaded guilty in January 2010 to five counts of racketeering, money laundering and wire fraud after admitting he sold investors interests in bogus settlements of sexual-harassment and whistle-blower lawsuits.”
“We fundamentally disagree with many of the characterizations contained in Mr. Rothstein’s deposition and will continue to vigorously defend the bank against claims related to Rothstein’s acts,” Maria Leung, a spokeswoman for Toronto-based TD Bank, told Bloomberg. “Beyond that, we cannot comment on pending litigation.”
“Eight people, including Rothstein, have been charged in the probe by the U.S. Of those, Rothstein and five others have been convicted,” Bloomberg notes. “Two of the men who pleaded guilty worked as technology assistants at Rothstein’s law firm and set up a fake TD Bank website showing Rothstein had $1.1 billion in a trust account, according to prosecutors.”
Investors who relied on that information ended up investing more than $35 million, Assistant U.S. Attorney Lawrence LaVecchio said in June in federal court in Fort Lauderdale.