The SEC has filed charges against a registered representative for allegedly stealing more than $2 million from a client and using the proceeds to finance the financial advisor’s personal spending.
In a complaint filed Friday in the U.S. District Court for the Southern District of New York, the Securities and Exchange Commission alleged that from December 2021 through March 2022, Clarice Saw misappropriated approximately $2.4 million from an elderly client.
Saw was working at Cetera Investment Advisers and Cetera Investment Services in Flushing, New York, during the time frame cited in the complaint, which did not name her employer.
The SEC claims that Saw used deception to obtain a power of attorney from the client, whom she first started working with in July 2020 when she was at Citigroup Global Markets Inc. in New York City.
While at Cetera, Saw falsified internal records, liquidated all of the customer’s securities holdings without his authorization and transferred all of the customer’s holdings to her personal bank and brokerage accounts without the customer’s authorization, the SEC alleged.
“Saw used a portion of the misappropriated funds to pay for her personal expenses, including approximately $100,000 in car and mortgage payments and thousands of dollars of cash withdrawals,” the SEC complaint states. “Saw used additional misappropriated funds to purchase securities in her name in her personal brokerage accounts.”
The SEC said it will seek in court to enjoin Saw from violating the laws she broke, disgorge the money she allegedly stole and pay a civil monetary penalty.
Saw, who lives in Pleasantville, New York, declined to talk to InvestmentNews when she was reached through her current firm, CoastalOne.
“I have an attorney,” she said. “I am not going to comment. Let me talk to my attorney.”
The alleged victim is a retired 87-year-old former janitor who lives in New York. He is an immigrant who does not speak, read or understand English, according to the SEC complaint. Saw has the same ethnic background as the customer and speaks his native language as well as English.
The customer received a life insurance payment in October 2015 when his wife died. The value grew to $1.8 million in July 2020, according to the SEC. The SEC said Saw took advantage of the customer, knowing that he had substantial assets and no immediate relatives.
Over the course of a couple of years, Saw ingratiated herself with the customer, taking him to medical appointments. She suggested to the customer that he make her his health care proxy, then presented him with a document — entirely in English — that was actually a power of attorney designating Saw as the customer’s agent.
“As Saw knew, the customer never intended to execute a power of attorney designating Saw or anyone else as his agent,” the SEC complaint states.
Saw left Citigroup in September 2021. She convinced the customer to transfer his account to her new firm, Cetera. In violation of Cetera’s rules, Saw never obtained Cetera’s approval to act as the customer’s agent under the power-of-attorney.
Saw resigned from Cetera in June 2022. It was defined as “employment separation after allegations” on her BrokerCheck record.
She faces a big challenge battling the SEC claims, said Andrew Stoltmann, a Chicago securities attorney.
“This is about as serious as it gets,” Stoltmann said. “The charges against this advisor, if true, certainly spell the almost immediate end of [her] career and possibly whoever [her] supervisor was.”
It’s the kind of investor ripoff squarely in the SEC’s wheelhouse.
“It’s really egregious conduct,” Stoltmann said. “These are the sort of acts the SEC has a hair-trigger reaction to.”