Investor Losses Probed
Several Illinois investors who each may have been cheated out of millions of dollars are among the clients of a Lehman Brothers broker from Cleveland under investigation by federal authorities, sources said.
Lehman Brothers Holdings Inc. officials acknowledged they have been working with the Federal Bureau of Investigation and Cleveland authorities to patch together customer records associated with broker Frank D. Gruttadauria, who worked in Chicago for another firm before moving to Cleveland several years ago.
The authorities are investigating whether Gruttadauria, 44, sent false account statements to about two dozen of his roughly 300 clients in the Midwest, said a source familiar with the investigation.
He has been missing since January, according to published reports.
Lawyers say their clients’ losses may amount to more than $100 million.
What is unknown at this point, however, is how much client money had been invested, how much was lost in the stock market decline of the last two years and how much might have been stolen, said Andrew Stoltmann, a Chicago attorney whose firm is representing some clients.
“We’re still piecing this together, but the sheer size of these cases is extraordinary,” Stoltmann said Friday.
A Lehman Brothers spokesman said Gruttadauria joined the firm in 2000 after Lehman purchased the private client business of SG Cowen Securities Corp., where Gruttadauria had worked since 1989. The broker got his start in Chicago, opening a local office of Hambrecht & Quist just before the 1987 stock market crash. That office closed in 1989.