Former RIA Charged In Investment Fraud
John Montague, a former RIA from New Jersey, who was barred by FINRA from the broker-dealer industry in 2011, pleaded guilty to a $900,000 investment fraud.
Montague was licensed to sell mutual funds, variable annuities, and insurance products, but he was not licensed to sell corporate or municipal securities, direct participation programs or options. Montague engaged in defrauding his clients by soliciting and inducing them to purchase investment vehicles that Montague was not authorized to sell. Moreover, Montague promised his clients a rate of return of approximately six percent on those investment vehicles.
Montague instructed his clients to make their investment checks payable to him. He then deposited the checks into his personal bank accounts. To maintain the clients’ confidence in the investments, Montague issued periodic “dividend” checks to his clients.
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