Markowitz

BACKGROUND

Factual background Plaintiff was the victim of a fraudulent scheme masterminded by Michael E. McCready, a financial representative of several national brokerage firms, including LPL and SmithBarney (now defendant Citigroup Global Markets, Inc.). McCready was a registered SmithBarney broker from 2002 until August 2004 and was a registered LPL broker from August 2004 to August 2005. Plaintiff’s relationship with McCready began in late 2003 or early 2004, while McCready was a broker at SmithBarney. At that time, Plaintiff gave McCready control over all of his finances, including several annuities with ING USA (ING), which were managed by McCready through SmithBarney. In early 2004, McCready recommended that plaintiff refinance his home with CitiMortgage, a division of Citicorp, which also owned SmithBarney. Plaintiff heeded McCready’s advice and in June 2004 refinanced the first mortgage on his home through McCready and SmithBarney with CitiMortgage. Unbeknownst to plaintiff, McReady obtained a second mortgage on plaintiff’s home with a $260,000 limit and diverted funds from the second mortgage to himself. McCready became an LPL registered representative in August 2004…