Lee Rycraft, Midwest Financial Strategies, Sanctioned by Regulators
The South Dakota Department of Labor and Regulation reportedly issued a Consent Order on December 27, 2024, against Midwest Financial Strategies and its representative, Lee Rycraft, (CRD#: 5770413) for violations of state securities laws.
Midwest Financial Strategies and its representative, Lee Rycraft, were reportedly sanctioned by the South Dakota Division of Securities for multiple violations of state and FINRA regulations. They allegedly operated a registered investment advisory (RIA) firm in South Dakota without maintaining the required surety bond, reportedly failed to timely update their ADV Form with accurate information about outside business activities and employment, and allegedly omitted material disclosures.
Additionally, they purportedly engaged in fraudulent and unethical conduct by misrepresenting material information, including reportedly using Rycraft’s personal email in place of clients’ and forging client signatures.
The firm also reportedly failed to properly maintain and preserve required books and records. These violations constituted breaches of SDCL 47-31B-411, ARSD 20:08, and FINRA Rules 2010 and 4511.
FINRA Sanctions Lee Rycraft
January 16th, 2024, FINRA reportedly suspended Rycraft for allegations that he forged or falsified the electronic signature of customers on documents. The findings stated that “Rycraft electronically signed the names of customers, some of whom were seniors.” All of the transactions were authorized and no customers complained, though two customers’ names were allegedly signed on documents without the customers’ prior permission.
The account documents, which included money transfer forms and electronic prospectus delivery forms, were required books and records of Rycraft’s member firm. Rycraft also allegedly falsely attested in annual compliance questionnaires that he had not signed or affixed another person’s signature on a document.
FINRA BrokerCheck: Lee Rycraft
The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.
According to FINRA, Lee Rycraft was reportedly registered with the following FINRA firms, among others.
09/14/2018 – 02/10/2022 LPL FINANCIAL LLC (CRD#:6413) WATERTOWN, SD
07/27/2010 – 09/25/2018 AXA ADVISORS, LLC (CRD#:6627) WATERTOWN, SD
04/26/2010 – 06/16/2010 EDWARD JONES (CRD#:250) ST. LOUIS, MO
Failure to Supervise
All broker-dealers have a responsibility to adequately supervise their advisors. They must ensure they have procedures and systems in place to detect broker misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Class Action Lawsuit vs. Individual FINRA Arbitration Lawsuit
You may wonder whether a large class action lawsuit is a better litigation option than an individual FINRA arbitration case. The answer depends on many factors, but typically if the loss sustained is large (say larger than $100,000), an individual arbitration claim is likely a better option. Class action lawsuits as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.
FINRA Lawsuits
If you have suffered investment losses with Lee Rycraft, the securities attorneys at The White Law Group may be able to help you by filing a FINRA lawsuit. Please call our offices at (888) 637-5510 for a free consultation. We take cases in all 50 states including South Dakota.
National Securities Attorneys
The White Law Group, LLC is a national law firm in securities fraud, securities arbitration, investor protection, and securities regulation and compliance. With offices in Chicago, Illinois and Seattle, Washington, the firm is dedicated to assisting investors across all 50 states with claims against their brokerage firms. Since its founding in 2010, The White Law Group has handled over 800 FINRA arbitration cases.
Last modified: May 5, 2025
