Posted in: FINRA | Ponzi Schemes | SEC | Greedy Brokers | Breach of Fiduciary Duty | Risky Investments | Private Placements | Variable Annuities |
Beverly Hills stockbroker Bambi Holzer has fielded a mind-boggling 42 customer disputes in her 25-year career, according to her disciplinary record from the Financial Industry Regulatory Authority. And yet, despite receiving sanctions from federal regulators, and settlements with former clients totaling at least $11.4 million, Holzer is currently a registered representative for Wedbush Morgan Securities.
This January, Holzer once again became the focus of investor lawsuits - and four fresh customer complaints ¬- regarding the improper sale of private placements.
The attorney representing one of the plaintiffs believes additional claims involving Holzer are forthcoming, because the broker had recommended her clients purchase private holdings in Provident Asset Management. FINRA expelled Provident Asset on March 21 less than a year after the SEC exposed the broker-dealer’s $480 million Ponzi scheme that affected thousands of investors.
Eric Segall, a spokesman for Wedbush Morgan, defended his firm to InvestmentNews by saying Holzer was the only broker who had sold Provident to customers. Segall also said the majority of Holzer’s customer complaints stemmed from one product, variable annuities, which “affected her entire customer base.”
Wedbush Morgan, however, knowingly employed a broker with an extremely checkered disciplinary past, including a 21-day suspension and $100,000 fine from the National Association of Securities Dealers in 2005. Holzer’s firm knew she had come under fire for selling a high-risk securities just a few years prior, and yet allowed her to sell risky private placements.
Provident Asset promised returns of up to 18 percent per year, and investors believed their money was being used to purchase interests in legitimate oil and gas businesses. Instead, the money was recycled in classic Ponzi scheme fashion-some old investors would be repaid with new investor money, while the rest of the investments were either embezzled or lost, according to FINRA.
According to Forbes. Holzer would pitch variable annuities with an in-person slide presentation at Loews Beverly Hills Hotel, in an apparent attempt to attract clients. Even if Holzer were to blame her disciplinary past on a volatile financial product, it should be known she aggressively sold those products.
Holzer and her ex-employer, UBS Financial Services, settled her most-recent customer complaint relating to variable annuities last June. And yet, Holzer had no reservations with selling another high-risk product that is now under heavier scrutiny from federal regulators.
FINRA announced earlier this year it would be stepping up its enforcement of private placement securities, which are issued by corporations - as promissory notes - to investors outside the market. More than a dozen firms are currently being investigated for their sales practices related to private holdings, while other firms have been questioned for information.
As Forbes mentioned in their article on Holzer last year, the broker may still be more familiar to investors for her career successes rather than regulatory failures. On her Web site, Holzer boasts appearing on The Today Show, NBC Nightly News, CNN, Bloomberg, USA Today and CNBC. Holzer has published four books on investing, and her office in Beverly Hills displays a picture of herself with the late Pope John Paul II.
Until Holzer is expelled from the securities industry, she will be able to attract additional southern California clients who may be unaware for her disciplinary history.
If your portfolio value plummeted due to investments through Holzer, Provident Asset, or variable annuities, you are certainly not alone. Contact us so we can give a free evaluation of your case.
