CHICAGO, Dec. 4, 2008 (GLOBE NEWSWIRE) -- Higgins & Burke P.C. and Stoltmann Law Offices P.C. today announced a settlement with ING Financial Partners Inc. (NYSE:ING) in the amount of $2,918,181. The settlement is a return of funds converted by ING's financial advisors, Nevin Gillette and Richard Wells, to 38 victims. The settlement relates to the firm's failure to supervise Gillette and Wells in two long running ponzi schemes.
The clients, all represented by Higgins & Burke of St. Charles, Illinois and Stoltmann Law Offices in Chicago, Illinois, filed lawsuits against ING in 2007 alleging the firm failed to supervise Gillette in a decade long ponzi scheme centered in Sterling, Illinois and Wells in a ponzi scheme for five years, also centered in Sterling. Gillette was previously sentenced in September of 2007 to eleven years in federal prison for defrauding his clients. Wells was sentenced in February of 2008 to three years and five months in federal prison for defrauding his clients.
Gillette, while employed by ING, told investors they were investing in safe investments called "Guaranteed Investment Contracts" or "Trust Accounts". In reality, Gillette was converting these funds for his personal use. Gillette used the funds to purchase a six-bedroom home with an indoor pool and Jacuzzi. Gillette also used investor money to purchase $1.4 million in fishing and hunting equipment, $135,000 in paintings, hundreds of suits and jewelry.
Wells, while employed by ING, recommended to investors investments in "Mutual Trusts" or "Mutual Bond Trusts," which purportedly provided safety of principal and interest income. In reality, Wells converted these funds for his own personal benefit.
The settlements with ING related to Gillette total $2,647,563 on behalf of 31 individuals. The settlements with ING related to Wells total $270,618 on behalf of seven clients.
According to St. Charles attorney John Burke, "These settlements send a clear message to ING and other brokerage firms that failing to supervise their financial advisors will not be tolerated in Illinois." According to co-counsel Andrew Stoltmann of Chicago, Illinois, "ING repeatedly looked the other way and ignored dozens of red flags that should have put the firm on notice of the long running criminal schemes orchestrated by Gillette and Wells. Both of these rogue agents were flagrantly and blatantly operating under the nose of ING supervisors and yet the firm took no action to stop them."
The settlement reflects a partial settlement with one of the Defendants in this action. Most of the plaintiffs still have claims pending against other defendants which include firms that Gillette and Wells either previously worked for prior to their employment with ING or worked with while employed by ING. The settlement with ING has no impact on claims related to other defendants.
While almost all disputes with brokerage firms get decided in FINRA arbitration, the individuals who settled with ING did not have account agreements with the firm. Therefore, they were not obligated to arbitrate with ING. All of the investors' cases were filed in the Circuit Court for the Fourteenth Judicial Circuit in Whiteside County, Illinois.
Mr. Burke warned, "With the volatility in the stock market over the last three months, unscrupulous financial advisors are even more likely to defraud their clients and convert customer funds. As financial advisors find it more difficult to earn a living legitimately, the incentive grows to cut corners and defraud their clients. This settlement makes it clear when financial advisors get caught with their hands in the cookie jar, the firms will have to pay."
More information is available at www.HigginsandBurke.com or www.InvestmentFraud.Pro