NEW LONDON — A former New London financial advisor who plowed his clients retirement savings into a high-risk financial product that went bust has been ordered to repay $4.8 million to his victims, although how much they ultimately recoup and how long it will take remains unclear.

Thomas Chadwick, a former principal in the now defunct New London financial advisory firm Chadwick & D’Amato, additionally has been fined $750,000 by state regulators for mishandling his clients’ money.

His victims included many retirees with little appetite for financial speculation, dozens of whom suffered “devastating losses,” the New Hampshire Bureau of Securities Regulation said on Thursday.

The settlement — which permanently bars Chadwick from holding a securities license in the state — comes nine months after state regulators brought an administrative action against him, alleging he lost more than $11 million of his clients money after he put their funds into a high-risk investment that collapsed and wiped out their retirement savings.

“We are extremely pleased that this longstanding case has reached a conclusion. Countless individuals across both New Hampshire and Vermont had their lives upended by the losses associated” with Chadwick’s risky investing, Brian Lenares, senior staff attorney with the Bureau of Securities Regulation, said in the news release. “This settlement should serve to underscore just how important it is that financial advisers follow the law and act with the utmost care when they hold another person’s financial well-being in their hands.”

The $6.2 million gap between the $11 million amount announced last year and the $4.8 million settlement announced on Thursday is partly owing to relief granted under a parallel consent order issued by Vermont financial regulators on behalf of Chadwick’s Vermont clients who lost money, according to New Hampshire officials.

In addition, the initial amount of money lost has been reduced by privately negotiated settlements between Chadwick and affected parties and by a portion of the amount which has been deemed excluded from recovery.

As detailed by regulators, Chadwick, a well-known New London financial adviser whose family name has long been synonymous with business in town, moved money belonging to his clients — many of whom were elderly retirees on fixed incomes — into an esoteric financial product called “Credit Suisse X-Links Monthly Pay 2xLeveraged Mortgage REIT Exchange Traded Notes,” or REML, for short.

The REML product, which was tied to the commercial real estate market, offered outsized returns to investors.

For a time, it delivered on that promise — until the COVID-19 pandemic hit, shutting down business and emptying offices across the country. When REML shares collapsed to near zero, it wiped out Chadwick’s clients — many of whom were not aware that Chadwick had moved their money into the high-risk instrument.

Furthermore, Chadwick did not seem to grasp the danger to which he was exposing his clients, according to the consent order.

State financial regulators said their investigation found that Chadwick “demonstrated that he did not fully understand the risks associated with REML” and instead “indicated” to clients that REML “was a low to moderate risk investment” and “a good product for steady monthly income that could help meet monthly income needs.”

Under the settlement reached with state regulators, the “first 10%” of the clients’ money that was invested in REML is deemed “reasonable” and not recoverable, according to the consent order.

So, for example, if a client owned 100 REML shares, he would be eligible to recover only the value of 90 shares.

The consent order also calls for Chadwick to reimburse $250,000 to the Bureau of Securities Regulation for costs incurred during its investigation and adjudication of this case. The Bureau noted it would not collect either the fine or the reimbursement amounts “until all ordered restitution is paid in full.”

But when, and how much, restitution will be paid to Chadwick’s clients is not at all clear.

Chadwick, according to the consent order, has informed state financial regulators “of an inability to satisfy the ordered amounts in full.”

If that’s the case, the Bureau said it has the right to go to court or pursue other “legal processes” to claw back the owed money — which presumably could include seeking disposal of other assets Chadwick may own.

Chadwick said via email on Thursday that he had no comment about the consent order.

Contact John Lippman at jlippman@vbnews.com.