Alabama Man Sentenced to Five Years for Conspiracy to Commit Securities Fraud

On Thursday, David McFadden, a 62 year-old resident of Orange Beach, Alabama, was sentenced to five years in prison for his orchestration of a securities fraud scheme. The scheme resulted in over 150 of McFadden’s clients collectively losing millions of dollars. Sadly, many of those victims were those reaching retirement, their financial futures now in ruins.

McFadden’s sentence is the longest possible for his charge, conspiracy to commit securities fraud. Despite his guilty plea and a potential plea agreement which would have had him serve 18-24 months in prison, District Judge Carl Barbier demurred given the excessive damage done to the victims.

During his time as a registered representative for Securities America Inc., McFadden ran Diversified Financial Services, a financial services company based out of Baton Rouge. Most of his victims were solicited via seminars he held for longtime Exxon-Mobil employees. He advised them to make early withdraws from their retirement accounts and purchase equities. McFadden would make commissions on such risky purchases, all the time knowing that such equities were unsuitable for those approaching retirement.

In addition, it has been charged that McFadden advised many clients to retire prior to when it would be advisable for them to do so. As a result of this advice, some are now facing the prospect of having to return to the workforce. At his sentencing, McFadden faced his victims and offered an apology. "I know you all were literally watching your financial future evaporate before your eyes," he said. "I let you all down, and words cannot express how much I regret that.”