A great scene is in GoodFellas is when Jimmy chastises Henry for getting arrested because he allowed himself to be incriminated through wiretaps. For years, I’ve been warning advisors about the referrals they make and it seems to have sparked a lawsuit in connection with the allegations of theft by Vantage Benefits.
Architectural engineering company Allpoints Inc. is suing their advisor, World Equity Group Inc. for negligently choosing Dallas-based Vantage Benefits Administrators Inc. as Allpoints’ new administrator for its employee retirement funds. It is alleged in the lawsuit that Vantage stole over $400k from the Allpoints’ 401(k) plan.
Allpoints claims that World Equity Group should have researched Vantage Benefits and its owner Jeff Richie where it could have come up with information about Richie and his punishment by the Securities and Exchange Commission. Richie was previously a registered broker who was barred from the financial services industry following an action for securities fraud.
Whether World Equity Group should be liable for making a referral and/or having a strong hand in getting Vantage hired, the fact that they are being sued in a Cook County Illinois court is all that advisors should be concerned about since there is a price to be paid for a bad referral.