Ex-stockbroker ordered to pay over $4M to former clients

January 30, 2018 GMT

A Pennsylvania stockbroker who was kicked out of the securities industry for fleecing customers has been ordered to pay more than $4 million in damages ahead of his federal trial on criminal fraud charges.

Wall Street’s regulator ruled last week that Anthony Diaz must pay damages to 19 former clients, noting he failed to respond to arbitration. The award includes compensatory damages of about $1 million, punitive damages of $2.9 million and attorneys’ fees of more than $400,000.


Once regarded as one of the nation’s top brokers, Diaz earned millions of dollars by pushing high-fee, high-risk “alternative investments.” His smooth-talking tactics repeatedly landed him in hot water: Records show he affiliated with 11 investment firms in 15 years, getting fired from five of them and resigning from another before the Financial Industry Regulatory Authority finally gave him the boot.

Diaz left a trail of customer complaints.

“These are people who gave their life savings to this man, and he was just a predator who was looking out for his own best interest and not the best interest of my clients,” said Adam Gana, an attorney representing customers covered by last week’s damage award.

Gana said he will likely go after Diaz’s assets and earnings in an attempt to recover the judgment.

“We will fight tooth and nail to get these people their money,” he said. “This is not money that our clients can afford to lose.”

Diaz has so far avoided payment on at least one other arbitration award.

Bruce Kilby, a retired pharmaceutical company worker who invested about $350,000 with Diaz, won a $220,000 award against him a few years ago. He said Monday he has yet to see any money.

Diaz’s attorney did not immediately return a message seeking comment. He previously has said that Diaz believes his actions were “proper and legal.”

First Allied Securities Inc., where Diaz worked between 2005 and 2009, settled the case in November, according to records. Terms of the settlement were not disclosed.

Federal prosecutors allege Diaz advised his clients to put their money in real estate investment trusts and equipment leasing partnerships, types of higher-risk, illiquid investments geared to wealthier, more sophisticated investors.

He had them sign blank documents, then he falsified their net worth, income and risk tolerance to make it appear they met the suitability requirements of the products, according to a grand jury indictment.


Diaz’s criminal trial is scheduled for April.

The financial regulator, meanwhile, is still getting complaints about Diaz. Last month, a former client alleged that Diaz falsified documents and misled her and her husband, according to a filing. The woman reported about $95,000 in damages.