The Chicago-based securities and investment fraud attorneys at Stoltmann Law Offices are investigating claims by victims of former Securities America financial advisor Hector May. According to the criminal information filed against Mr. May in the United States District Court for the Southern District of New York, Mr. May was indicted on charges of conspiracy to commit wire fraud and investment advisory fraud in Case No. 18-cr-00880. On January 14, 2019, May’s guilty plea was formally accepted by Judge Vincent L. Briccetti. His sentencing date has yet to be provided by the court. By pleading guilty, May consented to a monetary judgment of $11,452,185 and agreed to forfeit certain property including multiple fur coats, Cartier bracelets, and Rolex watches.
According to published reports, on February 14, 2019, the SEC formally barred May from the securities industry. This bar seems obvious given he pleaded guilty to criminal charges, but the SEC cannot proceed with any portion of a civil case until the criminal matter wraps up. The SEC complaint against May provides some details about his scam which included selling bonds to his fiduciary advisory clients that did not exist. The SEC states May’s scam bilked at least $7.9 million from at least 15 advisory clients. The SEC also states that May executed this scheme with his daughter, Vania May Bell. This father-daughter duo devastated several families.
At all times relevant, May was a licensed, registered representative of Securities America which is a registered broker/dealer and subsidiary of Ameriprise Financial. May also provided his investment advisory services under the umbrella of a Registered Investment Advisor called Executive Compensation Planners, Inc. According to FINRA Rules, Securities America had an obligation to supervise Mr. May and his conduct even if it was executed through Executive Compensation Planners. According to FINRA Rule 3280 and at least three NASD Notices – NTMs 91-32, 94-44, and 96-33 – Securities America was responsible for supervising May’s conduct. In a case decided by the Federal District Court for the Northern District of Iowa, the court ruled that this duty and obligation to supervise can apply to even those people that are not formally clients or account owners of the firm, like Securities America here. See McGraw v.Wachovia Securities, 756 F. Supp. 2d 1053 (N.D. Iowa 2010 ).