LPL Will Pay Victims of Montana Broker’s Ponzi Scheme

Monica Lindeen, Montana’s commissioner of securities and insurance, also announced that LPL Financial will also pay a fine of $150,000 to the state of Montana.

The fine resolves the claims involving the alleged Ponzi scheme of Donald Chouinard, a former LPL registered representative in the Kalispell area. The state charged LPL for failing to supervise Chouinard.

“Too many hard working Montanans lost their savings due to the actions of Mr. Chouinard, but today we started the process of recovering those losses,” said Lindeen.

In September, the Securities Department issued a temporary cease and desist order against Chouinard and filed a notice of proposed agency action against him and his companies, DC Wealth Management, Inc., and DC Associates, Inc., according to Lindeen’s announcement.

The action alleges that Chouinard and his companies committed securities fraud and conducted a Ponzi scheme involving Montana and Idaho investors who invested in what they thought was a “day-trading” program. In fact, the investors received proceeds taken from money contributed by newer investors.

For instance, the department alleges Chouinard persuaded one investor to obtain a $100,000 loan, promising a high return in 30 days. Instead of investing the $100,000, Chouinard used $50,000 to pay off a previous investor, deposited $25,000 into his personal account, and paid the other $25,000 to his attorney.
     
Furthermore, Chouinard allegedly traded accounts without authorization and failed to provide the investors with statements or documents.

The state of Montana is continuing to pursue individual claims against Chouinard.