© 2020 Arizent. All rights reserved.

SEC bars ex-LPL advisor accused of Taylor Swift Africa scam

Register now

Then-LPL Financial advisor Dain F. Stokes sent his client a text message saying that Taylor Swift needed funds for her charity.

"We need $30k this week to finish the project in Africa so we all get paid big,” Stokes said in the December 2018 text, according to investigators. “I can come up with $20k, but I'm $10k short, so you have it? If not, no worries, but Taylor asked me to personally ask you, lol, she likes you! Let me know."

The client later delivered many of Stokes’ text messages to police in Fremont, New Hampshire, according to an order from the state Bureau of Securities Regulation.

Stokes, 60, allegedly defrauded three clients of $576,000 by soliciting their investments for a phony charitable project in Africa that he claimed to be managing the finances on behalf of the “Shake it Off” singer, state investigators say. The SEC barred Stokes from the industry in June, after the state said it plans to order him to pay $20,000 in a fine as well as restitution to the clients.

Stokes told three of his “long-term LPL clients'' they would receive a 20% return on their investment in 90 days for this project, according to the SEC. Instead, Stokes sent the money to “various people and entities all over the United States,” and spent it on his own personal expenses, the New Hampshire order states.

Stokes, who says he will pay the $576,000 back to clients as state regulators ordered, denies the claims against him and maintains that the funds did go to the "TayMission Foundation" — an organization he says is legitimate and provides food, shelter, education and medical services for people in Africa.

“I’m an honest guy,” he says. “I didn’t defraud anyone. The charity is legitimate. The clients are getting back their money, and everyone is going to move on.”

An LPL spokeswoman did not respond to a request for comment. LPL terminated Stokes in August, citing the state’s initial petition for relief in connection with the fraud case, according to FINRA BrokerCheck.

Former financial advisor Dain Stokes is an "experiential writer & poet," according to his Twitter profile.

The client — who was not named in the bureau’s order — had provided copies of cancelled checks, unsecured promissory notes and text messages to authorities earlier that month, according to state investigators.

In the order, investigators included six text messages that Stokes sent to one client who invested $201,000. In one message from May 2019, Stokes claimed Swift was meeting with Bill Gates and the rest of the sponsors “so we all get paid,” the document states. The following month, Stokes was still promising to deliver the returns, according to investigators.

"Trump's illegally locked my bank accounts, and I'm fighting it in the Federal Bank Commission in the New Hampshire AG's Office,” Stokes told the client, according to investigators. “Taylor is releasing a new song on Instagram in 30 minutes and I'm promoting it."

During questioning at the Fremont police department, Stokes maintained that the name and details of the project were “confidential,” the document shows. At the time, he declined to comment whether he had deposited his client’s money in his personal account. He had also told the client that the investment “was being done away from LPL and that he would be terminated by LPL if they found out,” according to investigators.

Stokes declined to answer questions from Financial Planning regarding any details of the organization, including who served on its supposed board and whether it had an affiliation with Taylor Swift. He said there is no website.

“You know, we're privately held and we like to keep our business obviously out of the media and private,” Stokes says.

Stokes did provide an Instagram account and the name of two entities registered with the New Hampshire Department of State, “TayMission, Inc.” and “TayDay Rescue, Inc.” They weren’t registered with the department until May 2020, according to New Hampshire business records.

Stokes says he never reported the outside business to LPL and that he discouraged clients from using his LPL email for any “TayMission stuff.” However, some emails did go through that email, so LPL knew about the Africa project and failed to supervise him properly, he says.

LPL immediately terminated him following New Hampshire’s order and didn’t give him a chance to respond, according to Stokes. The firm dissolved his business and failed to pay him about $70,000 in trailing commissions, he says.

In addition to the state order, LPL’s termination and the SEC ban, FINRA barred Stokes from the industry in September, BrokerCheck shows. He also faces two pending client arbitration cases alleging misappropriation of funds and “suitability issues through misrepresentation and poor advice,” according to the summary of the cases on BrokerCheck.

Stokes remains active on Twitter, where he identifies himself as an “experiential writer & poet” in his bio and frequently criticizes President Trump. He says he’s writing a book entitled “Outweeting @realdonaldtrump: On the Road in Search of Heart and Soul.”

Noah Abrahams, staff attorney at the New Hampshire Bureau, declined to comment on whether they had referred the case to criminal authorities, citing an open investigation. A Taylor Swift spokesperson did not respond to a request for comment on whether the singer had ever communicated with Stokes.

Editor's Note: This story has been updated to include comment from Dain Stokes.

For reprint and licensing requests for this article, click here.