A settlement was reached in the case of a former Equitable Advisors broker accused of stealing from an elderly client and the estate of the client’s late sister, Advisor Hub reported.
43-year-old Ejiro Ode Okuma, based in Georgia, agreed to pay over $13 million to resolve charges from the Securities and Exchange Commission that were contained in a complaint in U.S. District Court.
The SEC accused Okuma of breaching his fiduciary duties in a matter that dates back to 2022. The SEC alleges that in March of that year, Okuma began misappropriating the assets of an 81-year-old client as well as assets from the estate of the client’s recently deceased sister. The complaint alleges that in February 2023, Okuma, without the client’s knowledge or consent, opened a brokerage account for one of the client’s trusts and transferred in more than $9 million in securities from the client’s other accounts.
He also allegedly transferred money from the client’s brokerage account to the sister’s estate, where he then used his access as the administrator to send funds to accounts affiliated with Okuma’s family members.
“Okuma facilitated the fraud by, among other means, electronically impersonating the client to access the brokerage account, forging the client’s signature on checks, and transferring funds from the client’s accounts to Okuma’s own bank account and other accounts over which he had control,” the complaint said. The SEC said the client suffered from health issues and relied almost exclusively on Okuma for financial and personal matters, including paying bills, arranging a caretaker, purchasing groceries and household items and handling his mail.
In all, Okuma is accused of misappropriating over $9.8 million and using the funds for himself, including building a multi-million-dollar residence and buying vehicles and vacation homes.
According to the charges, Okuma took several steps to conceal his continued misappropriation from the client, including setting up login credentials so he could access and control the account, authorizing check writing from the account, and creating an email account to electronically impersonate the client.
The complaint notes that when Okuma left his advisory firm in May 2023, he told the client their advisory relationship would continue at the new firm. However, the SEC alleges Okuma did not transfer any of the client’s assets to the new firm or establish accounts for the client with the new firm. This meant the new firm did not have a record of the client being a client of the firm or the ability to monitor and detect Okuma’s conduct with the client’s funds.
Okuma was charged with violations of Section 17(a)(1) of the Securities Act, Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c), and Sections 206(1) and 206(2) of the Investment Advisers Act.
Okuma agreed to be permanently enjoined from violating the charged provisions and was ordered to pay over $13 million, which included $9,025,424.89 in disgorgement with prejudgment interest of $1,029,626.64 and a civil penalty of $3 million. The Financial Industry Regulatory Authority barred Okuma in December, after he refused to provide documents and information requested in connection with its investigation. He was permitted to resign from Equitable in June amid allegations that he misappropriated funds from a non-Equitable client, according to his BrokerCheck report.
A spokesperson for Equitable did not respond to a request for comment. Okuma could not be reached for comment.
Hyman Cotter routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter at (844) 316 8277 or through our online contact form for a no-cost evaluation of your matter.
