May 15, 2013
HELENA – Montana Securities Commissioner Monica J. Lindeen has ordered New York City-based Chelsea Financial Services to pay eight Montanans more than $260,000 after alleging that one of the firm's salespeople made hundreds of inappropriate transactions from their investment accounts to generate commissions for himself.
In addition, the firm will pay a $40,000 fine and all the state's investigative costs.
"Montanans put a lot of trust in their financial brokers," said Lindeen, the state's top securities regulator whose office investigated the case. "When brokers violate that trust – no matter how big they are, no matter where they are located – we're going to hold them accountable."
Lindeen's office began fielding complaints in January from Montanans with investment accounts with Chelsea Financial Services. All of them had accounts held by one Chelsea salesperson, Joseph Biondolillo, who operates a branch of Chelsea in New York City.
Lindeen's office launched an investigation and alleged that a high number of unsuitable sales and purchases were occurring in the Montanans' accounts – transactions that were costing Montanans money in commissions and fees. The victims were located throughout the state.
The state ordered Chelsea to pay its Montana victims a total of $262,371, an amount which represents the investors' losses plus 10 percent interest from the date of wrongdoing. The firm paid that restitution late last month. In addition, Chelsea will pay a $40,000 fine and the state's investigative costs.
Chelsea is no longer operating in Montana.