Former Stockbroker Misses Repayment Deadline, Faces Jail

A former North Dakota stockbroker and admitted felon who missed a court deadline to pay $2.1 million to his former clients now faces prison, notes an article in the Grand Forks Herald.

The stockbroker, Ross Haugen, pleaded guilty earlier this month to taking $2.5 million in spurious investments from six clients. In a plea deal in state court, Haugen agreed to repay $2.1 million he stole from clients in 2006 and 2007. For that, the state’s attorney promised not to request prison time for him. However, Haugen missed his Jan. 29 payment deadline and now faces a March 13 sentencing for the illegal sale of securities. The prosecutor will request “serious time behind bars,” according to the article.

Haugen was a stockbroker through the 1980s and 1990s. According to court documents, over his stockbroker career, customers accused Haugen of performing unsuitable transactions, breach of fiduciary duty, unauthorized trading, selling away, misrepresentation and fraud. He also sold unregistered securities, and worked as an investment advisor when not registered as one.

About 10 years ago, facing pressure from state and federal authorities, Haugen surrendered his North Dakota securities license. His probation from previous convictions also stipulated he was barred from working as a financial adviser. Nevertheless, he sold over $30 million in phony securities to 150-plus clients in North America, notes the Herald article. Haugen frequently exploited elderly clients (met through church), by offering big returns, says the prosecutor. 

Sometimes Haugen would simply pay off existing investors with cash taken from newer investors. Some of the cash Haugen placed in overseas bank accounts in Switzerland and Malta; some he and two associates spent outright. For instance, according to an official press release from May 2010, one elderly victim complained to the North Dakota Securities Department that he’d invested $60,000 with Haugen. This was meant to deliver a “high return on a safe, short-term investment.” In reality, Haugen wired the cash to out-of-state accounts and used it to cover his own expenses.

A federal receiver has been working to recover the money and restore it to Haugen’s victims, notes the Herald.

Do you believe that you were a victim of a securities fraud scam? Then call Sokolove Law today for a free legal consultation about a securities fraud lawsuit.


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