An arbitrator later ordered Bales and the owner of the firm that employed him to pay $1.4 million — about half for compensation and half in punitive damages — for taking part in “fraud” and “unauthorized trading,” according to a ruling from the Financial Industry Regulatory Authority, the independent disciplinary board for brokers and brokerage houses.
A review of the investor’s account statements, obtained by The Washington Post, shows that valuable stocks were sold off in favor of penny stocks as part of what the arbitrator called “churning” by Bales to pump up commissions.
The client, Gary Liebschner, a 74-year-old retired engineer for AT&T, said Sunday that he “never got paid a penny” of the award.
There is no indication that the civil ruling weighed on Bales in recent years. He never attended an arbitration hearing in the case — although he had been given legal notice of his right to present his version of events — and an attorney for Liebschner said it had been years since his client had attempted to collect the award from Bales.
But the finding of financial fraud adds to an increasingly complex picture of a man who, on the one hand, is described by friends and neighbors as a family man and an even-tempered soldier, and, on the other, had repeated encounters with the law, including an arrest on suspicion of drunken driving, involvement in a hit-and-run accident and a misdemeanor assault charge.
In addition to those incidents, he had evidently been under financial stress. His home near Tacoma was put up for a short sale a few days before the March 11 shootings in Afghanistan.
Bales is being held at a detention center at Fort Leavenworth, Kan. He is expected to be formally charged in the coming days.
On Monday, his attorney, John Henry Browne, told the Associated Press that Bales has a sketchy memory of the night of the massacre and recalls very little about the time when military officials said the shootings occurred.
Browne did not respond to requests for interviews over the past several days. At the time of the complaint involving the stock trades, Bales did not have an attorney.
Bales, a 38-year-old father of two, was on his fourth war tour when he reportedly walked out of his unit’s camp alone in the black of night in a rural area of Kandahar province and shot sleeping villagers, most of them women and children. As a member of the 3rd Stryker Brigade Combat Team, 2nd Infantry Division, he had deployed three times to Iraq and once to Afghanistan from Joint Base Lewis-McChord in Tacoma.