Securities Commissioner Fines Former Stanford Broker $10,000

Arkansas Securities Commissioner Heath Abshure on Tuesday ordered former Stanford Group broker Christopher Collier to pay a $10,000 fine for selling worthless CDs to a retiree who couldn't afford the risk.

The fine was ordered even as two other clients were arguing that Collier should not be able to discharge in bankruptcy court the combined $382,000 they gave him for CDs because the money was obtained by fraud. Collier filed for bankruptcy protection in July 2010.

The trial of the complaint by Nancy McGraw and Pfeifer Sutter Family LLC began Tuesday morning in Bankruptcy Judge John Mixon's court and was expected to continue all day. Among the witnesses scheduled to testify on Collier's behalf was Little Rock businessman Brent Bumpers.

Bumpers told ArkansasBusiness.com that he had never invested any money with Collier or any other Stanford broker. He did, however, ask Collier about the CDs in 2008, shortly after he sold his Brent & Sam's bakery, and he said Collier told him that the CDs were not insured or guaranteed in any way.

McGraw and the Pfeifer Sutter company claim that Collier intentionally defrauded them by telling them that the Stanford CDs were insured by the Federal Deposit Insurance Corp. Debts incurred by fraud are not dischargable through bankruptcy. 

Inappropriate Investment
The client who inspired the $10,000 fine ordered Thursday bought $300,000 worth from Collier in the last days of December 2007.

Even Stanford's own sales material stated that the CDs were only being offered to accredited investors with net worth of at least $1 million and annual income of $200,000 or more. But Collier's client was over age 65, had a total invested portfolio of less than $700,000 and annual income of about $60,000.

"Collier's client has not received any money back from the $300,000 invested in the Stanford CDs with Collier," according to the order.

After the Stanford Group was shut down in March 2009, Collier joined the Little Rock office of Sterne Agee & Leach Inc. He left Sterne Agee last August and voluntarily terminated his registration as a broker-dealer at that time, according to Abshure's order.