FINRA filed a complaint against former Purshe Kaplan Sterling Investments and MML Investors Services, LLC adviser Stanley Clayton Niekras for allegedly billing two elderly customers for more than $70,000 for purported "estate planning" and "financial planning" services that FINRA says Niekras knew he was not entitled to, and for which he did not receive firm approval.
FINRA says Niekras' misrepresentation to his 90 and 91-year-old clients began in 2013, when he falsely portrayed that his customers would not pay commissions for a variable annuities (VAs) product that would have actually resulted in about $75,000 in commissions to Niekras.
Niekras has been the subject of customer complaints alleging similar VA misconduct in the past. Several settled disputes from 2003 to 2010 and listed in Niekras' BrokerCheck report alleged "faulty advice," unsuitable VA recommendations, and misrepresentation, totaling over $860,000 in granted damages.
OHO Disciplinary Proceeding #2013037401001
The findings state that with regard to the 2013 variable annuity incident, the IRS filed a tax lien against Niekras (CRD #2417486) in March 2013, and when his associated firm (at the time it was MML) asked him about the debt, Niekras allegedly said, "I have business cooking that will more than settle the IRS debt," referring to the aforementioned VA sales according to FINRA's report.
Investigators wrote that when the clients' family ultimately declined to purchase the VAs, Niekras met with his elderly customers and presented them with a "Preliminary Billing Estimate" document, claiming that he had provided "estate planning and record keeping" services to the tune of $69,330.17 in fees and expenses.
The complaint indicates Niekras presented the bill to his 90 and 91-year-old clients when he knew they were in "physical and mental decline."
According to FINRA, the billing estimate sought retroactive compensation for 264.11 hours of estate planning work at $250 per hour, and additionally declared that if his elderly clients—or their children—decided to accept Niekras' proposal and invest in the VAs, then that person "will be relieved of any billing exposure."
Niekras allegedly admitted he engaged in "a bit of a fabrication" when he told his elderly investor that his "company needs to be compensated for the time they keep [him] on the payroll," as Niekras purportedly did not actually have a company that kept him on a payroll at that time.
FINRA concluded that Niekras knew he was not entitled to "estate planning" or "financial planning" fees from his customers and, according to investigators, Niekras actually admitted that the bills he presented to his clients were intended to replace the commissions he otherwise would have received through the VA sales.
If you have invested with Stanley Clayton Niekras or with any broker or financial adviser whose unsuitable recommendations, fabrications, or misrepresentations relative to variable annuities, commissions, fees, or fake bills have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.