By Matthias Rieker 
 

A federal judge in Georgia ordered a former LPL Financial Holdings Inc. (LPLA) financial adviser to return the almost $2 million he stole from his clients and pay a $80,000 penalty.

The Securities and Exchange Commission accused Blake Richards of Buford, Ga., of stealing the retirement savings and life-insurance proceeds of at least seven clients between 2009 and last year. The agency says at least two of the clients were elderly.

He told the clients to write him checks and that he would invest their money in life-insurance policies and annuities as well as stocks and bonds, but used the money for his personal use and provided fake account statements, according to the SEC.

In one case, he told a client he would invest his money in Facebook Inc.'s (FB) initial public offering but spent the money on himself, the agency says.

Mr. Richards admitted wrongdoing and cooperated with SEC the investigation. However, he pleaded with the court for a lower penalty, according to the court's ruling.

U.S. District Court Judge Willis Hunt Jr. of the Northern District of Georgia ruled Tuesday that Mr. Richard's violations were significant yet noted that his ability to pay was limited, the ruling says. Mr. Richards has 30 days to pay the penalty and the disgorgement.

For years, Mr. Richards production at LPL Financial "has been virtually nonexistent," the SEC said in its complaint. He had joined LPL in 2009 from Ameriprise Financial Inc. (AMP), where he was also accused of misappropriating customer money, according to his BrokerCheck record.

Mr. Richards was fired by LPL and barred from the industry by the Financial Industry Regulatory Authority last year, his BrokerCheck record shows.

A spokeswoman for LPL said the firm found out about Mr. Richards's misappropriations and launched an internal investigation. It also notified regulators and law enforcement authorities, she said. None of the funds obtained by Mr. Richards were from LPL accounts, she said.

Mr. Richards's lawyer didn't immediately return a phone call for comment.

Write to Matthias Rieker at matthias.rieker@wsj.com

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