Q: My stockbroker was part of a Ponzi scheme and he subsequently filed for bankruptcy. Can I still recover money I lost
from him?
A: Even if your stockbroker has filed for bankruptcy you may still be able to recover investment assets lost in connection with the Ponzi scheme. If your stockbroker was licensed with a registered broker dealer then a FINRA arbitration could be commenced against the broker dealer and recovery of your lost investment assets could be made through that entity. If your stockbroker was operating as an independent advisor then recovery can be a little more of an issue. Much will depend on affiliations with other investment advisors that your stockbroker may have been working for as an agent. For instance, our lawfirm is presently involved in litigation against an investment advisor in connection with a Ponzi scheme. The investment advisor ran an LLC and operated an advisory as an independent but was also an agent for another investment advisor. Through this agent/principal relationship we were able to form a cause of action against the broker dealer for recovery of our clients lost assets connected with the Ponzi scheme.
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