A barred former LPL Financial advisor who claimed to be managing the finances of a charitable project in Africa on behalf of Taylor Swift is now facing Class A felony theft charges.
Dain F. Stokes promised at least one client 20% returns within 90 days of the investment while sending text messages saying he “just had a long talk with Taylor about it in the middle of the night lol” and that “Taylor asked me to personally ask you, lol, she likes you!,”
LPL
Stokes “obtained funds” which were the “property of” his clients under an “agreement to make a specified payment to a charitable foundation and/or project in Africa,” according to nearly identical language in the two indictments handed down by grand juries in Rockingham County against the former broker. “Dain Stokes recklessly failed to make the specified payment and dealt with the property as his own.”
Twitter profile
Efforts to reach Stokes through a former attorney who has represented him, phone numbers associated with him and his active Twitter
In an interview two years ago with Financial Planning after the state securities regulator’s consent order and his bans from the SEC and FINRA, Stokes denied wrongdoing.
“I’m an honest guy,” Stokes
Representatives for LPL didn’t respond to a request for comment.
As part of the settlement with the state, the firm agreed to make changes to its heightened supervision program. LPL “fully cooperated” with investigators after they began the probe of Stokes based on police reports in Fremont, where one client alerted authorities and provided the texts, according to the securities regulator’s 2020 settlements with LPL and Stokes.
LPL had placed Stokes on heightened supervision in October 2016, in part because of “concerns for his deteriorating personal financial condition and declining credit score,” according to the firm’s consent order.
“However, the bureau determined that LPL failed to adhere to several of the terms of its own heightened supervision plan with respect to Stokes, including but not limited to failing to visit Stokes' office on an unannounced basis, failing to visit Stokes' office at least quarterly, and failing to follow-up on questionable emails identified in LPL’s system for further review,” the document states.
Hallmarks of fraud
The correspondence with clients included the text messages with Stokes assuaging doubts about missing money and talking up his connections with the global pop star behind hit songs like “Shake it Off,” “You Need to Calm Down,” and “Blank Space.” Investigators believe he used the clients’ money for his personal expenses and to send it to other people of his choosing. As late as May and June 2019, he was even incorporating Bill Gates and President Trump into the purported charitable investment, according to the state regulator’s consent order.
“Trump's illegally locked my bank accounts, and I'm fighting it in the Federal Bank Commission in the New Hampshire AG's Office,” Stokes texted one client in June 2019, according to investigators. “Taylor is releasing a new song on Instagram in 30 minutes and I'm promoting it.”
Taking advantage of a celebrity’s fame and pledging high returns represent two “hallmarks” of fraud cases, according to Mary Hansen, a former SEC enforcement official who is now a partner with the Duane Morris law firm. Victims who are seniors and a scam that goes beyond bad investment advice often prompt criminal prosecutors to take on cases that might otherwise have remained in civil or administrative proceedings, Hansen said.
“The fact that LPL did the right thing and paid the investors was good,” Hansen said. “I think COVID may have played a role in the criminal authorities not acting as quickly as they normally would.”
Representatives for the state attorney general’s office declined to comment beyond the short indictment documents in county court. Stokes will be arraigned on the charges next month ahead of the potential trial.
