The United States Securities and Exchange Commission (SEC) has charged a former Chicago-area financial advisor with stealing more than $1.2 million from an elderly client who currently suffers from dementia (the Client) and using the funds for personal and business expenses. In its Complaint filed on September 29, 2022, the SEC alleges that from at least 2012 to 2020, Bradley A. Goodbred (Goodbred, CRD No. 3184210) “solicited the Client to transfer a total of $1,295,000 to one of Goodbred’s businesses to make purported investments in real estate investment trusts (‘REITs’) on the Client’s behalf.” The Complaint alleges violations of the antifraud provisions of the federal securities laws and seeks injunctive relief, disgorgement, prejudgment interest, and civil penalties.
According to FINRA BrokerCheck, Goodbred spent most of his career working as a registered representative and investment adviser representative in the Roselle, Illinois office of LPL Financial LLC (LPL). Goodbred was affiliated with LPL from 2009 to 2021 and was terminated by LPL on February 1, 2021, for utilizing “unapproved power of attorney to facilitate distribution of customer funds to a real estate company representative owned and operated.” Shortly thereafter, the Financial Industry Regulatory Authority (FINRA) barred Goodbred from the securities industry on February 16, 2021, after he refused to respond to a FINRA information request related to the termination.
The SEC alleges that at Goodbred’s instruction, the Client – who is now 97 years old and residing in an assisted living facility’s memory care unit – wrote 10 checks including one money order to Northern Lights Properties, LLC. The transferred funds, which totaled $1,295,000, included proceeds from securities sold with the advice and approval of Goodbred. Instead of using the Client’s money for investments in REITs for the benefit of the Client, Goodbred allegedly used the funds to pay credit card debts, income taxes, auto loans, and other expenses. Goodbred is reported to have repaid the Client a total of $454,141.
Pursuant to FINRA Rule 2010, brokers must “observe high standards of commercial honor and just and equitable principles of trade.” Likewise, FINRA has stated that a fundamental responsibility for fair dealing is “implicit in all member and associated person relationships with customers and others.” (FINRA Rule 2111.01). In addition, under FINRA Rule 3110, broker-dealers such as LPL are required to establish and maintain a system to supervise the activities of its associated persons, reasonably designed to achieve compliance with applicable securities laws and regulations. Customers who suffer losses due to a broker’s fraudulent behavior may be able to pursue a claim against the broker-dealer if the firm failed to adequately supervise its registered representative.
Investors who have suffered losses with Bradley A. Goodbred, or another financial advisor, may contact our office at (201) 771-1115 or info@gialawgroup.com for a no-cost, confidential consultation to learn more about their legal rights. The attorneys at Giarrusso Law Group LLC have extensive experience with handling all manner of claims on behalf of investors who have been victimized by securities fraud or related misconduct.