Eight former clients of former Georgia investment manager Aubrey Lee Price, who pleaded guilty to defrauding his bank and investors, have won judgments against an Atlanta firm once affiliated with Price.
Lawyers for the clients claimed FSC Securities Corp. did not properly supervise Price when he worked for the company before starting his own firm. An attorney for FSC did not immediately return a message seeking comment.
The eight investors were awarded a total of about $1.3 million, with damages ranging from about $49,000 to more than $420,000. The awards were handed down by an arbitration panel for FINRA, a nongovernmental financial industry watchdog.
Sums were based on the amounts clients invested with Price, said John Chapman, an Ohio attorney for the investors.
Price made international headlines for an investment and bank fraud scheme that wiped out the savings of dozens of clients and led to the failure of Montgomery Bank & Trust. As the scheme unraveled he faked his own death and went into hiding.
Price pleaded guilty last year and will spend the next 30 years in federal prison.
Chapman said Price started his scheme before he left FSC in January 2008, and that FSC failed to protect clients.
“You have senior citizens who are trying to go back to the workforce,” he said. “They put their whole nest egg with this guy. They’re finding it difficult to make ends meet.”
About 60 former Price clients have settled or been awarded damages by FINRA in cases involving FSC, Chapman said. Federal authorities said Price defrauded more than 100 clients, including many who invested in the bank, years after Price’s involvement with FSC.
Price and a group of investors had ostensibly tried to save Montgomery Bank, in the tiny town of Ailey, by buying a stake in late 2010. Instead, he was accused of embezzling more than $21 million from the institution, in an attempt to cover massive losses within the bank.
Price disappeared in 2012 and wrote suicide notes confessing to defrauding clients and the bank. He was arrested in a Brunswick traffic stop in December 2013.
Separately, a receiver or court-appointed guardian for Price’s companies is attempting to recoup investors’ losses through the liquidation of assets and other means.
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