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Stockbroker Faces Both Criminal Charges and SEC In Theft

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JUNE 10, 2002 VOLUME 9, NUMBER 50

Charles Zandford was a stockbroker working for Prudential-Bache Securities in 1987 when he first met William Wood. Mr. Zandford persuaded the elderly Mr. Wood to place over $400,000 in a brokerage account for investment. The money was intended to take care of not only Mr. Wood but also his developmentally disabled daughter, but when Mr. Wood died four years later it was all gone.

When he set up the brokerage account Mr. Zandford secured Mr. Wood’s authority to execute trades on the account directly, without having to get Mr. Wood’s approval on individual transactions. Over the next four years he systematically liquidated most of the account. On at least 25 occasions he transferred money from Mr. Wood’s account to other accounts for his own benefit.

The transfers were uncovered in the course of a routine examination of Prudential-Bache accounts by the National Association of Securities Dealers. Mr. Zandford was indicted on 13 counts of wire fraud, was convicted and sentenced to 52 months imprisonment and $10,800 in restitution.

The federal agency in charge of monitoring stockbroker activity, the Securities and Exchange Commission (the SEC), filed its own action after Mr. Zandford’s criminal charges were instituted. The SEC claimed that Mr. Zandford had violated securities laws as well as criminal laws, and requested that he be ordered to return $343,000 in ill-gotten gains. At the request of the SEC, the trial judge ruled that Mr. Zandford’s criminal conviction settled most of the issues in the securities violation case, and entered judgment against him.

On appeal Mr. Zandford argued that the SEC’s rules were not intended to deal with simple theft. Because the thefts had been properly dealt with as criminal actions, he insisted, there should be no further SEC enforcement proceeding. The Fourth Circuit Court of Appeals agreed and reversed the SEC’s victory.

It is not often that the United States Supreme Court gets involved in elder abuse matters, but the SEC’s petition for review in this case was granted. In a unanimous decision written by Justice Stevens, the high court reinstated Mr. Zandford’s SEC penalties.

The Supreme Court noted that the SEC’s regulations were adopted in the wake of the 1929 stock market crash, as part of a government plan to improve the general reliability and predictability of the markets. Even though Mr. Zandford’s actions really amounted to theft rather than manipulation of securities markets, they were subject to SEC regulation. The fact that the securities sales were conducted in the usual business manner did not deprive the SEC of jurisdiction, since the stockbroker’s purpose was improper. SEC v. Zandford, June 3, 2002.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.