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Thursday, June 09, 2005

Investment Advisor Todd Eberhard Receives Stiff Jail Sentence - No Restitution to Investors

On June 7, 2005, I appeared before Federal Judge Robert Sweet with my two clients who were victimized by Todd Eberhard, their Investment Advisor. Eberhard literally stole money out of their account (forging their signatures on wire transfers and checks) and churned mutual funds in their accounts to generate huge commissions for himself. My client Robert Pellegrini was fleeced of almost $10 million and Debra Loeffler lost $2.6 million.

The Judge sentenced Eberhard to 13 years 4 months in a Federal prison for his crimes. This is a very stiff sentence for a "white collar" criminal. I argued to the Judge that Eberhard was no different than an armed robber except that he wore a suit and tie when he stole the money.

Unfortunately, despite the stiff sentence, my clients have received very little in the way of restitution for their losses. The Securities Investor Protection Corporation (SIPC) has only returned a small fraction of their losses under the SIPC program. Apparently, Eberhard spent or hid his money and there is very little for the defrauded investors to recover.

I am pursuing securities arbitration claims against Eberhard's "clearing brokers" Paine Webber and Pershing who we will prove knew or should have known of Eberhard's fraudulent activities and were in a position to stop them. We will seek to hold the clearing brokers accountable for all of the investors' losses.

This case highlights the absence of sound regulation of clearing brokers and the minimal investor protection from SIPC.


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