A Georgia couple has filed suit against Delray Beach,Florida-based IBM Southeast Employees' Credit Union and a formerCUNA Brokerage Services, Inc. (CBSI) representative, alleging thatthey were bilked out of their retirement savings and that thecredit union should have known the advisor and her alleged businesspartner were shady, according to documents filed in Georgia StateCourt.

Edward and Yvonne Ray claimed that in November 2016, IBMSECUinvited them to meet with CBSI advisors to discuss consolidatingtheir retirement assets so they could be better managed. During ameeting with two advisors at one of the credit union's branches,the couple agreed to transfer about $330,000 to CBSI. But insteadof putting the money into CBSI brokerage accounts, the advisorsallegedly diverted it to three other companies, two of which theycontrolled. The plaintiffs also claimed their signatures wereforged on some of the paperwork.

One of the advisors had also been suspended from the securitiesindustry at the time of the meeting, they claimed.

For the first six months of 2017, the couple contacted one ofthe CBSI advisors to find out where their money was. By July 2017,however, CBSI had allegedly informed the couple that there was nomoney in their CBSI accounts and that their advisor had left theorganization. The couple filed suit in January 2018.

“This is a case about a retirement-aged married couple that wererobbed at their own bank by unscrupulous financial advisersassociated with IBMSECU,” the complaint said.

“We are unable to comment specifically on the pendinglitigation, but we take any alleged breach of trust seriously.While IBMSECU disputes the Rays' claims, we are cooperating withregulators and law enforcement in their investigations of thismatter,” IBMSECU President/CEO Michael Miller said in a statementto CU Times.

In court filings, IBMSECU, which has $1.1billion in assets and about 81,000 members, denied the allegations,stating that, among other things, the damages were not caused byits negligence or conduct, that it had no fiduciary relationshipwith the plaintiffs, that it did not know the advisor named in thesuit was untrustworthy, and that it acted in good faith.

On April 30, the credit union asked the court to dismiss thesuit, stating that the couple's account application agreement withCBSI compelled them to arbitration, that the credit union didn'tparticipate in or benefit from the fraud, and that any purportedassertion that the advisor was trustworthy was “nothing more thanIBMSECU's expression of opinion, hope, and expectation.”

“Because plaintiffs cannot show that IBMSECU made amisrepresentation of fact plaintiffs' negligent misrepresentationclaim should be dismissed,” it noted.

A spokesperson for CBSI was also unable to comment on thelitigation, but indicated that it too took any alleged breach oftrust seriously, disputed the claims and was cooperating withregulators and law enforcement.