Thomas O'Neill, a former Piper Jaffray stock broker, is facing fines of up to $1.5 million and 10 years in prison after pleading guilty Wednesday to wire fraud and securities fraud in a Missoula, Mont. federal court, The Missoulian reported.
Prosecutors, who accused O'Neill, 55, of fleecing his elderly clients, waived 18 additional charges in exchange for his cooperation. O'Neill's scheduled sentencing date is April 19.
The federal case against O'Neill, a 15-year veteran of Piper Jaffray, focuses on a series of alleged violations committed between 1997 and 2001. According to prosecutors, O'Neill initiated at least 6,500 trades for clients without their consent. Prosecutors produced documents showing one client had slipped into a coma and later died while O'Neill traded on the man's behalf.
The investigation also led to sanctions against Piper Jaffray requiring the firm to pay $1.5 million in restitution to 38 clients in Montana and a separate $1 million find to the state. State auditors concluded O'Neill's actions were particularly offensive because he systematically churned accounts belonging to elderly customers.
O'Neil's improper trading generated an additional $200,000 of commissions for himself and raised clients' margin costs by more than $17,000, according to court documents. He avoided detection by changing the investment objectives of his clients' accounts to "speculative" from conservative. Piper Jaffray rewarded O'Neil with higher bonuses for generating higher commissions.