According to UK newspaper the Daily Mail, Stephen Greig, who was 73 years old when he was sentenced on Friday, persuaded people to invest up to £500,000 in fictional investments that offered a 7.5% return.
He forged letters telling clients how well their investments were performing, even going so far as to pay dividends.
Between 2006 and 2012, 10 victims lost a total of £1.2m.
Prosecutor Gareth Underhill told the court: “Mr Greig was a stockbroker and the victims were persuaded to invest significant sums of money in investments which in fact did not exist.”
Greig created fictional investment funds with names such as the Charles Stanley Capital Bond and targeted victims, including his long-term friends, many of whom were saving for their old age.
“By the middle of 2006, the Crown say it is apparent Mr Greig was in fact running a Ponzi scheme, taking new investment funds from clients – not to invest as he claimed in those named bonds or funds – but to pay back previous investors with whom he had guaranteed returns that, clearly, he could no longer meet,” Underhill said.
Greig pleaded guilty to 13 counts of fraud and two charges of obtaining money transfers by deception at an earlier hearing.
Could not face reality
Sentencing Greig to six years, judge John Bevan QC said: “I am genuinely sorry that you, as a 73-year-old man of hitherto good character, find yourself facing sentence for a series of serious frauds, but you have brought it on yourself.
“From 2006 to 2012, a long period, whilst in a position of trust as a stockbroker trusted with large sums of clients’ money, including friends of yours, you abused that and continued to do so as, what was to some extent a Ponzi scheme, escalated.”
He added: “You were out of your depth and unable to face what you had done by setting yourself unachievable targets and you could not face reality even when you were arrested as regards your work or your family.
“I accept you are now full of remorse for the victims and your family. You regret your behaviour and the failure to ask for help when you should have done and you have now ended up with nothing apart from a small pension.”
No lavish lifestyle
There was little evidence that Greig used the money to live an “absurd lifestyle”, the judge said.
Prosecutors could only identify £60,000 of the £1.2m that he had transferred to himself. Greig even sold family properties and used the proceeds to prop up the scheme.
His lawyer said: “It was not a scheme in which he set out to enrich himself, this was simply taking money from one investor to try to [get out of] the difficult position he had got himself in.
“It is obviously a tragedy for everyone concerned. Those investors who lost their money, happily it seems, are being compensated for such.”
A Charles Stanley spokesperson said: “This has been a very regrettable case of a former Charles Stanley stockbroker, acting fraudulently in a personal capacity.
“On discovery of the illicit activity, Charles Stanley took immediate action, engaging fully with the individuals involved, police, insurers and the [Financial Conduct Authority] to ensure no one was financially disadvantaged as a result of Mr Greig’s actions.”