FINRA’s Department of Enforcement investigated Drude and brought a complaint dated May 22, 2015 (Disciplinary Proceeding No. 2012033824902). FINRA alleged Drude was intimately involved in the client’s finances and even typed a will for the client less than 10 days after the client’s long-time companion passed away. The new will named Drude as executor and primary beneficiary of the client’s estate, which was valued at approximately $3 million. As a result, Drude stood to inherit most of this amount as the primary beneficiary of the client’s will.
During the time period Drude was establishing himself as executor and primary beneficiary of the client’s estate, Ameriprise Financial maintained written supervisory procedures that expressly prohibited a representative from serving or being named as “executor, personal representative.... attorney-in-fact or any other fiduciary for a client assigned to them…” Nevertheless, Drude continued to serve as executor and primary beneficiary of the client’s estate.
Based upon the foregoing alleged misconduct, FINRA asserted Drude violated FINRA Rules 2010, 3010, and 3270. For example, FINRA Rule 3270 prohibits any registered person from being an employee, independent contractor, sole proprietor, officer, director or partner of another person, or being compensated, or having the reasonable expectation of compensation, from another person as a result of any business activity outside the scope of the relationship with his or her member firm, unless he or she has provided written notice to the firm in the form specified by the firm and received approval from the firm. Here, Drude did not receive approval from Ameriprise Financial, and indeed, acted to conceal his relationship with the client by falsely misrepresenting on firm documents that he did not have an outside business relationship in the form of a fiduciary relationship with the client.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered damages as a result of investing with Drude, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation.