CRIME

Adviser's serial firings show 'big problem' at brokerages

  • In this May 26, 2016 photo, Bruce and Gail Kilby pose for a photo outside their home in Scotrun, Pa. The couple won a $220,000 arbitration award against their former financial adviser, Anthony Diaz. (AP Photo/Michael Rubinkam)

    In this May 26, 2016 photo, Bruce and Gail Kilby pose for a photo outside their home in Scotrun, Pa. The couple won a $220,000 arbitration award against their former financial adviser, Anthony Diaz. (AP Photo/Michael Rubinkam)  (The Associated Press)

  • In this May 26, 2016 photo, Bruce Kilby points to an exhibit in an arbitration case against his former financial adviser, Anthony Diaz, at Kilby’s home in Scotrun, Pa. Kilby and his wife, Gail, won a $220,000 arbitration award against Diaz. (AP Photo/Michael Rubinkam)

    In this May 26, 2016 photo, Bruce Kilby points to an exhibit in an arbitration case against his former financial adviser, Anthony Diaz, at Kilby’s home in Scotrun, Pa. Kilby and his wife, Gail, won a $220,000 arbitration award against Diaz. (AP Photo/Michael Rubinkam)  (The Associated Press)

  • In this May 26, 2016 photo, Bruce Kilby points to an exhibit in an arbitration case against his former financial adviser, Anthony Diaz, at Kilby’s home in Scotrun, Pa. Kilby and his wife, Gail, won a $220,000 arbitration award against Diaz. (AP Photo/Michael Rubinkam)

    In this May 26, 2016 photo, Bruce Kilby points to an exhibit in an arbitration case against his former financial adviser, Anthony Diaz, at Kilby’s home in Scotrun, Pa. Kilby and his wife, Gail, won a $220,000 arbitration award against Diaz. (AP Photo/Michael Rubinkam)  (The Associated Press)

A Pennsylvania financial adviser who was fired from five companies for misconduct is now facing federal fraud charges.

Anthony Diaz earned millions of dollars by pushing risky "alternative investments." Prosecutors say he falsified his clients' net worth, income and risk tolerance to make it appear they qualified for the investments.

His case illustrates what can go wrong when investment firms hire problem brokers.

An academic study from March found that 15 to 20 percent of the brokers at some of the largest financial services firms in the country have disciplinary records. And nearly half of financial advisers fired for misconduct find a new job in the industry within a year.

New federal regulations would force brokers to put their clients' financial interest ahead of their own.

Diaz has pleaded not guilty.