NEW YORK, June 20 A former Raymond James
broker accused of stealing $3 million from his clients by
creating a fictitious investment fund to channel their money
into his own personal bank account has been barred by Wall
The Financial Industry Regulatory Authority (FINRA) said in
a letter dated Wednesday and posted to its site that Claus C.
Foerster, a former broker based in Greenville, South Carolina,
had convinced his customers to invest in a fake income fund he
called "S.G. Investments," which was actually a personal bank
account he owned.
As a result, FINRA has permanently barred Foerster from
association with any FINRA member firm "in any capacity."
Raymond James said it has also reported Foerster's activities to
law enforcement and regulators.
FINRA said Foerster had instructed his clients to transfer
money from their brokerage accounts into their personal bank
accounts, and then write checks payable to S.G. Investments
under the assumption that they were investing in a fund.
Foerster even went so far as to give some of his customers fake
account statements and provided at least two of them with
purported dividend payments on a monthly basis.
The Ponzi scheme, which had been operating since 2000,
involved 13 of Foerster's clients, FINRA said.
Foerster, through his lawyer, declined to comment.
Raymond James said it terminated Foerster's employment after
he admitted to misappropriating the client funds. The firm said
it has begun to make restitution to the involved clients.
"The company was not a legitimate investment opportunity and
Foerster ultimately used the client funds for his own personal
purposes," Raymond James said in a statement. "At no time did
these activities involve Raymond James, its systems or other
Foerster had been in the industry for 25 years, according to
his FINRA broker record. He had also previously worked at J.C.
Bradford & Co, Citigroup Inc and later Morgan Keegan & Co Inc,
which was eventually bought by Raymond James in 2012.
(Reporting by Ashley Lau in New York; Editing by David