Clients Say Broker Bilked Millions
BOSTON (AP) _ A former broker allegedly bilked $6 million from clients, including friends and family members who are suing him to try and recover their money.
Donald Martineau, 56, admitted the scheme in a note to family members left behind last year after an unsuccessful suicide attempt, The Boston Globe reported today.
Martineau hasn’t been charged with any crimes, but federal prosecutors and the U.S. Securities and Exchange Commission are conducting an investigation, according to a civil lawsuit.
Some plaintiffs are questioning whether his employer, Merrill Lynch, ignored warning signs of Martineau’s dealings, which were unrelated to the firm.
Merrill Lynch fired Martineau after learning of the alleged fraud last year, company spokesman Bill Halldin told The Associated Press early today.
``These private arrangements were never disclosed to Merrill Lynch, and did not occur in Merrill Lynch accounts,″ Halldin said.
Martineau declined comment to the Globe, but took responsibility for his actions in his suicide note.
``Please don’t hold this against Merrill Lynch,″ the Globe quoted the note as saying. ``I was the problem. Desperate people do desperate things.″
Martineau, who joined Merrill Lynch in 1979, wrote that in 1987 he began advising some clients to invest in a venture he controlled called D&D Real Estate. The company claimed to make short-term loans to options traders and guaranteed an annual return of 11 percent. He said he also faked some clients’ signatures on wire transfer documents.
D&D Real Estate was ``nothing more than a pyramid scheme,″ according to a lawsuit filed by a former client, Hans Viezens.
Merrill Lynch said it had no idea of the alleged scheme until Martineau attempted suicide in April 1998.
The firm has returned an undisclosed amount of money to clients who had money stolen, or who believed money was stolen, in a Merrill Lynch-backed investment, the Globe said.