Rob Spawn is not your typical volunteer. An expert witness with a long career in wealth management, Spawn had never been asked to help in a legal aid case before. So he was surprised to receive an email from NLSLA’s Legal Director David Pallack in early March, asking for his assistance in a case involving an elderly, disabled client named Elizabeth Madison, whose small savings were stolen by a financial advisor.
When Spawn read the case, he was shocked.
“I went to David and said, ‘This is absurd.’ I told him, “I can’t believe they’re not going to just give her her money back.’”
Madison was an actress, musician and backup singer before a serious car accident left her disabled and unable to work. After the accident, she received a modest personal injury settlement, which she hoped to safely invest. It was all the money she had, and she wanted to make it last. It afforded her a weekly ride to church and an occasional breakfast with a friend.
A recommended financial advisor saw an opportunity. He created a corporate entity to control her funds and made himself an officer. Over the next two years, he took all of her money.
The investment company he had worked for when she met him took no responsibility because he no longer worked there.
Pallack was fairly certain Madison would win the case, but he worried about how she would survive in the years it would take to finally bring the case to trial. She could barely afford food. She couldn’t afford transportation to church. She was completely isolated. He wanted to compel the investment firm to settle, and fast. But he was hitting a wall.
Rob Spawn had 39 years of wealth management experience. He knew which documents to ask for in order to signal to the investment company that he understood exactly how they had violated their own rules and broken the law.
“The damage was done at this investment firm,” he said. “I asked for mountains of documents, including the supervision policies, fiduciary policies – things I know every firm has policies for.” He knew a supervisor would have had to sign off on the new account.
“It listed the advisor’s name as a signatory on the account—that would have had to be approved by centralized compliance and it never would have been approved.”
The strategy worked, and the investment firm agreed to settle in June. Madison, now 80, can comfortably afford her groceries, and take an occasional Uber to meet a friend at a restaurant or go to church.
“This is a small amount of money and they were so clearly wrong,” Spawn said. “There were so many ways it was obvious they had no chance of winning, but they didn’t care. They say they care about their people. Well, they care about certain people.”
Spawn said he thought about his own mother when he first read Madison’s case. “You put someone you know in the client’s place,” he said. “And you immediately understand what those little things—like going to church—mean for them.”
The experience was so rewarding, Spawn offered to do more pro bono work for NLSLA. “I’d be happy to be an ongoing expert witness but, as David said, NLSLA doesn’t get a lot of securities cases.”
NLSLA and Ms. Madison are so grateful for Mr. Spawn’s dedication of his time and talent and we could not have settled so quickly without his assistance.