On September 28, 2017, the SEC filed a Complaint against Tarek D. Bahgat, an investment advisor based in New York until September 2016. The SEC alleges that from at least December 2014 to September 2016, Bahgat misappropriated approximately $378,000 from his clients. According to the SEC, Bahgat misappropriated his clients' money by obtaining internet access to his clients' brokerage accounts and causing transfers from their accounts to his own accounts or the accounts of his company, WealthCFO. At times, Bahgat also obtained internet bill-paying privileges in his clients' accounts by posing as his clients (or having his assistant pose as his clients) in telephone calls with the securities brokerage firms holding the clients' accounts. According to his BrokerCheck Report with FINRA, Bahgat was registered with Gradient Securities, LLC and Cambridge Investment Research, Inc. during the time that he misappropriated his clients' money.
Bahgat allegedly left the United States for Egypt in September 2016. Unfortunately, investors who lose money due to theft by investment advisors are often unable to recover their losses from the advisors, who have either spent or lost the money. Depending on the facts and circumstances surrounding the theft, however, the securities brokerage firms with whom the advisor was registered may have civil liability for the losses due to, among other reasons, the failure to properly supervise the advisor and the clients' accounts, which would have prevented the theft.