Call Now For a Free Consultation:
(614) 502-6165

Broker Jeffrey T. Kluge Under Investigation for Unauthorized Trading

Meyer Wilson is investigating potential unauthorized trading claims against former broker Jeffrey T. Kluge (CRD# 2187964).

Kluge’s broker career consists of a single 25-year registration with Merrill Lynch. He was suspended as a broker in April 2017 by the Financial Industry Regulatory Authority, or FINRA, for allegedly failing to respond to a FINRA request for information.

Kluge recently pleaded guilty to two counts of felony bank fraud in a federal criminal proceeding. He was accused of running a scheme that resulted in $8.7 million in losses for two Minnesota commercial banks.

The scheme began in 2001, when Kluge fraudulently obtained a line of credit from Alliance Bank. As collateral, he pledged certain shares in municipal bond funds that were already pledged for loans Kluge had obtained from Merrill Lynch. Kluge used falsified account statements to substantiate these bond holdings to Alliance Bank.

Kluge ran a similar scheme in 2007 against Platinum Bank. This time, Kluge submitted falsified account statements to the bank using a phony email address and a fabricated Merrill Lynch employee identity.

The federal plea agreement requires Kluge to pay nearly $8.7 million in restitution, $250,000 in fines, and to serve up to six and a half years in prison.

In November 2016, Kluge was the subject of two civil actions in a Minnesota state court brought by plaintiffs raising claims of fraud, breach of contract, and claim and delivery. He was also subject to two preliminary attachment orders linked to allegations of intentional fraud and improper disposition of property.

According to Kluge’s FINRA BrokerCheck Report, Kluge faced his first reported customer dispute in April 2009. The customer took issue with Kluge’s sale of an auction rate security made just before the market for such securities suffered unprecedented illiquidity. This dispute was resolved when Kluge’s firm repurchased the securities at issue at a cost of over $2.1 million.

More recently, Kluge was implicated in five customer disputes filed in November 2016 that accused him of unauthorized trading conducted in October 2016. All five of these unauthorized trading disputes were resolved in December 2016 for over $40,000 each.

Unauthorized trading can leave investors bearing financial risks they never intended to accept. Those risks can result in losses for the investor. For non-discretionary accounts, brokers are required to first get the investor’s authorization before making any trades on their portfolio.

Unfortunately, not all brokers follow that rule. The opportunity to make a commission on the trade may be too much temptation for some less scrupulous brokers.

Investors who’ve lost money to unauthorized trading are in a position to hold the broker responsible for that loss. Claims of unauthorized trading are typically handled through FINRA arbitration.

If you suspect you may be the victim of unauthorized trading, contact Meyer Wilson for a free consultation. Our attorneys have helped hundreds of clients recover millions of dollars lost to investment fraud. Call us at our toll-free number, or fill out our online request form.

Related Posts:

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Columbus Office

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

248-817-8214
41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram