Home Banking & Finance White Plains retiree wins $450,000 judgment against unregistered financial adviser

White Plains retiree wins $450,000 judgment against unregistered financial adviser

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A White Plains man who lost all but $84 of his retirement fund has won a $450,000 judgment against the unregistered financial adviser who traded away his nest egg on risky investments.

U.S. District Judge Vincent L. Briccetti ruled on Oct. 29 that Greg Aberle of Lakeville, Minnesota, must pay the judgment to Frank Allgaier.

financial adviser white plainsAllgaier was 76 when he began investing with Aberle, an airline pilot, in 2008. He had heard Aberle on the Money Matters Financial Network on WOR radio, on which Aberle had paid to appear under the name Greg Peterson.

Peterson had legally changed his name to Aberle in 2007, but continued to present himself as Peterson in financial dealings.

Aberle allegedly claimed on the radio program that he had a unique method of saving money for his clients. He required them to turn over their user names and passwords to online brokerage accounts, ostensibly to save on fees, and he charged a 30% commission only on gains greater than the S&P 500 Index.

Allgaier gave Aberle access to his IRA account, according to a court filing, “and unwittingly fell into (Aberle’s) trap.”

Allgaier claimed he told Aberle to preserve capital and achieve some growth. Instead, he alleged in a 2013 lawsuit, “Aberle engaged in high-volume trading of option securities and leveraged exchange traded funds.

“Aberle’s trading strategies were unsuitable in light of Allgaier’s advanced age, medical conditions, net worth, objectives and circumstances.”

In 2010, Allgair was diagnosed with cancer. He instructed Aberle to liquidate the IRA account to cash if the balance dropped below $150,000.

The balance dropped from $230,000 to $127,000 in nine days in 2010.

Allgair again instructed Aberle to move funds into cash. But Aberle, according to the complaint, continued to “follow the same high-volume and risky strategies as before.”

Aberle allegedly responded at one point, “No one here is a registered broker. … We serve purely as an educational service and offer assistance when asked to join up as a trading partner to help manage investments.”

Allgaier demanded that Aberle reimburse him for not following his instructions. Aberle allegedly responded, “Yes, I will be able to make up some of the losses.”

Allgaier allowed Aberle to continue to have access to his IRA account. By February 2011, the account balance was $84.38.

In early 2016, Aberle filed for Chapter 7 bankrutpcy protection in Minnesota, automatically stopping a trial that was about to begin.

He declared nearly $1.4 million in assets and $676,000 in liabilities.

The automatic stay was lifted in 2017. But Aberle, who represented himself in the lawsuit, failed to appear for status conferences.

Aberle said in a letter to the court that he had been unable to travel to New York for financial and health reasons.

“I live paycheck to paycheck on my disability income and Social Security,” the letter states.

“I want to go on record that I 100% dispute all of Frank Allgaier’s claims in the lawsuit for which I cannot physically attend.”

Briccetti issued a default judgment last year and U.S. Magistrate Judge Lisa M. Smith held an inquest on damages.

She recommended $247,110 in damages – $177,501 in investment losses and $69,909 in commissions – plus interest, bringing the total to $449,529.

Briccetti adopted the recommendations.

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