Articles Tagged with Mutual of Omaha

If you or someone you know is a victim of financial fraud perpetrated by Ed Matthes of Oconomowoc, Wisconsin, there is legal recourse that could lead to the recovery of those stolen funds.  According to published reports, Ed Matthes, who was a registered representative for Mutual of Omaha Investor Services until March 12, 2019, missappropriated and stole upwards of $1 million from his clients.  According to the cease and desist order entered by the Wisconsin Department of Financial Institutions, Matthes stole money from client annuities after convincing them to give him authority to enter transactions and withdraw funds on their behalf.  Providing this level of authority to a financial advisor is rarely a good idea, but Ed Matthes was able to elicit a substantial level of trust and confidence from his clients. He created fake account statements which masked the withdrawals he had been taking, hiding his misconduct for years.  Matthes was also barred by FINRA – the regulatory body charged with overseeing and disciplining financial advisors and their firms.

According to Matthes’s FINRA Broker/Check report, several customer complaints have been filed against Matthes’s former firm, Mutual of Omaha Investor Services. These claims were filed as arbitration actions through FINRA’s Dispute Resolution program. Mutual of Omaha is certainly a viable target for Matthes’s fraudulent scheme since at all times he was a registered representative of the firm and as such, Mutual of Omaha had a duty to supervise his activities.  Case law establishes that brokerage firms like Mutual of Omaha can be held liable for negligent supervision even when the activities of the schemer fall outside the scope of his employment with the firm.  See McGraw v. Wachovia Securities, 756 F. Supp. 2d 1053 (N.D. Iowa 2010). Here, Mutual of Omaha had an obligation to supervise the withdrawal of funds from Matthes’s clients’ annuities to ensure they were legitimate, as part of the firm’s anti-money laundering compliance apparatus mandated by the Bank Secrecy Act, and NASD Notice to Members 02-21 and NASD Notice to Members 02-47.

Similarly, the annuity companies from which these funds were converted could have liability to the victims too. Anytime investors withdraw substantial amounts of money from annuities, the annuity company should be on alert, and presumably Matthes had the funds directed to a third party, which is a serious red flag. Stoltmann Law Offices will pursue all viable options to recover our clients’ funds.

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