Missouri Stockbroker James S. McClellan Jr. Accused of Selling Unlawful Investments
Former Missouri stockbroker James McClellan Jr. is being investigated by the state attorney general's office for his sales of unregistered securities.
Investigation by the securities litigation law firm of Chapman & Associates determined that McClellan, a former registered representative of a St. Louis broker-dealer firm, was already sanctioned by the Missouri securities regulators for selling the unlawful investments to St. Louis residents. He was barred from the securities industry in Missouri by the Secretary of State's office and the Commissioner of Securities.
McClellan Jr. is accused of having sold over $4.4 million in unregistered securities to about 20 St. Louis investors, many of whom were senior citizens.
The Chapman & Associates attorneys established that the "investment opportunities" offered by McClellan were for a time-share resort based in Egg Harbor, WI. The investments should have been registered, in accordance with Missouri and federal securities laws. They were not. "Securities laws and regulations mandate that only lawfully registered investments may be offered to the public," said John Chapman, a securities attorney. "Financial professionals must ensure compliance with the securities laws and regulations prior to offering securities to the public," said Chapman.
Under the Missouri securities regulators' order, McClellan is mandated to compensate his investors for their losses. However, "full compensation is unlikely," opined Chapman. "That is why it is important, in cases like this, to identify all other liable parties that can and have a duty to compensate investors for their losses," said Chapman.
The investigation of Chapman & Associates determined that, during the time he perpetrated his unlawful offering of securities, McClellan was affiliated with a financial institution. "Broker-dealer firms have a duty to adequately supervise their stockbrokers, and prevent violations of the securities rules and regulations," said Chapman.