Investigation of Investments Sold by Former Stockbroker Patricia S. Miller Finds Evidence of Classic Ponzi Scheme
The investment fraud Meyer Wilson has been contacted recently by customers who purchased investments sold by former Pennsylvania stockbroker Patricia S. Miller. An investigation conducted by Meyer Wilson's attorneys has uncovered evidence suggesting that Ms. Miller may have been operating a massive Ponzi scheme involving potentially dozens of investors and millions of dollars.
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business.
Documents provided to Meyer Wilson show that Miller may have sold investments through various potential sham entities, including KS Investments, KS Investment Partnership, K Squared Development, K Squared Investments, Buck Harbor Investments, Buck Harbor Investment Club, and Buck Harbor Investment Partnership.
Through these entities, investors may have been led to believe that they owned bonds issued by companies like The Hershey Company, General Electric, McDonald's Corporation, and Ford Motor Company, as well as municipal bonds.
It is unclear at this point, however, if any securities were actually purchased by Miller on behalf of customers. It may be the case that Miller was improperly pooling investors' funds through these entities in violation of federal and state securities laws, or that she otherwise misappropriated the funds deposited by investors.
Several documents provided to the Meyer Wilson were apparently passed off to customers as "account statements" but do not contain much of the required information that is mandated by regulators.
"This raises serious doubt about the legitimacy of what Miller sold to customers," says attorney David P. Meyer, managing partner of Meyer Wilson.
Another cause for concern, says Mr. Meyer, is the abruptness of Miller's recent departure from the brokerage firm of Investors Capital Corporation, her former employer.
"Customers were recently contacted by Investors Capital and told that Pat Miller was no longer with the firm. This announcement was made only a few days after Investors Capital received a customer complaint about Miller, and we know that Investors Capital is now asking customers to contact them with any information about their investments in KS Investments, K Squared, and Buck Harbor. In my experience, a brokerage firm is not going to take these steps unless it is concerned about potential serious liability," says Mr. Meyer.
Prior to working for Investors Capital, Miller was employed by the brokerage firm of Janney Montgomery Scott, LLC. Mr. Meyer says that documents reviewed as part of his law firm's investigation suggest that Miller's misconduct might have begun while she worked at Janney Montgomery and continued after she joined Investors Capital," says Mr. Meyer.
"Under those circumstances, if it can be shown that Janney Montgomery or Investors Capital failed to take reasonable steps to properly supervise Pat Miller's activities and what was going on in customers' accounts, then the brokerage firms may be held liable for all or part of the investors' losses in the Ponzi scheme. Simply put, brokerage firms cannot turn a blind eye while their brokers sell sham investments. They have an affirmative duty to operate a robust supervisory system that protects investors from this sort of misconduct," says Mr. Meyer.
Customers with questions or concerns about their investments with former stockbroker Pat Miller are encouraged to contact the investment fraud lawyers at Meyer Wilson at 888-390-6491 for a complimentary case evaluation and for additional details about their ongoing investigation.