Metropolitan Life Insurance Co. and its securities arm turned a “blind eye” to the activities of the late Rick Siskey, allowing investors to be defrauded in the alleged Ponzi scheme run by the Charlotte businessman, an investor alleges in a new lawsuit.
Siskey induced more than 100 people to invest in unregistered investment schemes from 2001 through 2016 from offices leased by MetLife and managed by MetLife employees, the complaint filed last week in Mecklenburg County Superior Court alleges.
The complaint also alleges that Siskey used investor funds to buy his prominent SouthPark mansion.
The lawsuit, which also names Siskey’s estate as a defendant, is the latest legal action following the unraveling of Siskey’s investment business. It adds new scrutiny to the role of MetLife, the New York-based insurance giant.
Siskey founded a firm called Wall Street Capitol around 2000 that operated under the MetLife umbrella. He was no longer associated with the firm at the time of his death, according to an attorney for some of its representatives, but he still worked in the same SouthPark office building topped by a Wall Street Capitol sign.
Kim Friedman, a spokeswoman for MetLife, said the company just became aware of the lawsuit and is reviewing it to determine “appropriate next steps.”
Lane Williamson, a lawyer for the Siskey estate, said his initial reaction to the complaint was to potentially seek a stay in the case. The suit will “simply drain assets from the estate that may have been made available to creditors, including the plaintiff,” he said.
Siskey took his own life in December, days after court filings gave the first public indication that he was under investigation for fraud allegations. An FBI affidavit unsealed in January alleged he was operating a Ponzi scheme and that more than 100 investors in a fund called TSI Holdings could be out as much as $19 million.
TSI and other Siskey companies have since been pushed into bankruptcy, and an attorney representing some of the investors has said losses could exceed $51 million. Siskey’s widow, Diane, has pledged to set aside $37.5 million of the $47 million in life insurance proceeds from her husband’s death for investors.
Evelyn Robinson, a 74-year-old Iredell County resident, is the plaintiff in the suit. She first invested with Siskey in 1998 after meeting him through a neighbor, the complaint says.
Robinson made investments in Siskey companies, including the Premier Fund, SouthPark Partners and WSC Holdings, and is now out more than $850,000, the complaint states.
According to the suit, Robinson met with Siskey in a suite at his SouthPark building that was shared with MetLife representatives, and Siskey sent MetLife representatives to her home to pick up checks and documents. Siskey also routinely sent her gifts and sent his assistant to take her to lunch, the complaint says.
The suit says that MetLife and its securities arm were aware of “improper activities” by Siskey that included the 1999 purchase of his SouthPark home for $2.8 million.
According to the complaint, Siskey used $800,000 of investor money to buy the property and Robinson was one of the investors in his funds. Later, Siskey used a second mortgage on the home to pay back investors who helped pay for the purchase, the complaint states.
The first public disclosure that Siskey was under investigation came in December when the federal government filed a notice saying that it could seize the home on Sharon Lane because of fraud allegations. At a court hearing in February, Joseph Grier, the court-appointed bankruptcy trustee, said Diane Siskey was looking to sell the home.
The complaint also says Rick Siskey continued to conduct private securities transactions in MetLife offices after he had agreed to a two-year suspension from the industry in 2004. That punishment came after he failed to give proper notice of the transactions to his employer, according to documents outlining the suspension.
MetLife, which has about 1,500 employees in its Ballantyne office, sold its securities arm to MassMutual Financial Group in July 2016.
Robinson’s suit, filed by Cornelius attorney James Surane, seeks unspecified damages from the defendants.
Staff researcher Maria David contributed.