Editors' pick: Originally published April 19.

Ron and Barbara Turner don't go out for dinner these days as they struggle to live on a reduced retirement nest egg.

The Turners invested $277,000 -- half their net worth -- in a penny stock, VGTel Inc., that collapsed in early 2014.

Their accounts had fallen to less than $3,000 by the time the government charged four people, including their investment adviser, with fraud in an indictment unsealed on January 6. By then, the Turners were resigned to a lifestyle where dinners, vacations and other special treats were out of the question.

"We don't do hardly anything," said Ron Turner, 77, when I interviewed him last week. "It's been a heck of an ordeal."

It wasn't the way the Turners, retired and living in Surprise, Arizona, had envisioned their golden years. 

The penny-stock swindle that wreaked havoc on the couple's financial security took in more than 100 investors, according to the U.S. Attorney in Manhattan.

A group of 20 of those victims, including the Turners, await a Finra arbitration hearing set to begin Sept. 20. They say that the two financial firms that cleared their trades, Wilson-Davis & Co. of Salt Lake City and COR Clearing LLC of Omaha, ignored red flags that something was amiss.

COR already has settled a complaint with two Ohio investors who sought $1.5 million in compensatory damages for their VGTel losses from a group that included COR, Cleveland broker Larry S. Werbel and Werbel's former employer, Summit Brokerage Services Inc. Werbel, one of the four indicted in January, was the subject of this column on Feb. 9.

The amount of COR's February settlement of the complaint, which was filed with the Financial Industry Regulatory Authority, was not disclosed in Finra's arbitration database. Summit and Werbel also agreed to settle, but on the day after Werbel's indictment and arrest, his lawyer said Werbel would not be paying his portion of the settlement.

Neither COR nor Wilson-Davis have been named in the criminal case or in a related case involving VGTel brought by the Securities and Exchange Commission.

The Turners and the other investors in the case pending before Finra, who are seeking $6 million in damages, are not suing their former adviser Sheik F. Khan, whose finances are precarious. In a settlement with Finra in November, Khan agreed to a bar of four months and ten business days but was spared monetary sanctions because the regulatory authority said she had "demonstrated an inability to pay."

That case involved Khan's sale of a list of 31 clients to the man who the government says is the ringleader of the scheme involving VGTel and other penny stocks, Edward Durante. He, Khan, Werbel and a former stockbroker at Wilson-Davis and COR, Christopher Cervino, all were charged in the January indictment. Durante is still in hock to the Securities and Exchange Commission for $25 million related to a previous fraud case.

Khan has said in legal filings that she did not know at the time that the person buying her customer list was Durante, who had spent 7 years in prison for the earlier penny-stock fraud. She said he used the alias "Ted Wise" in his dealings with her. Khan declined to comment. Lawyers for Durante and Cervino did not respond to email inquiries.

Werbel's lawyer told me earlier this year that his client disputes the allegations and looks forward to the opportunity to present his defense.

Khan, Durante, Werbel and Cervino have pleaded not guilty to the criminal charges.

When the Turners and their fellow plaintiffs gather for their arbitration hearing, they will have to contend with a question that dogs many penny-stock fraud victims: When red flags wave prominently in customer accounts, is it the responsibility of the firm clearing the trades to detect fishy trading and do something about it?

Wilson-Davis and COR have said in legal filings that they did nothing wrong and that they, too, were deceived and hurt by the activities at issue. Both firms declined to comment.

But one of their former employees was a key player in making the alleged scam work.

If you liked this article you might like

Trump, Wall Street, Strive to Make Securities Fraud Great Again

Six Reasons I'm Thrilled Trump Is Ditching the Little Guy Investor

Now You See It, Now You Don't: Adviser Gets Go-Ahead to Zap 11 Investor Complaints From Record

In 2016, an All-Star Collection of Dubious Achievers