Articles Tagged with Outside Business Activities

On June 8, 2021, the Financial Industry Regulatory Authority (“FINRA”) and Titan Securities entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) whereby Titan Securities consented to a censure and $20,000 fine.  The sanctions are a result of Titan Securities’ failure to properly conduct an evaluation of a broker’s proposed sale of Future Income Payments to customers.

Unrelatedly, just last week, Titan Securities CEO and owner Brad Brooks was suspended for one year for failing to supervise a broker’s outside business activities between 2009 and 2012.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019061705101

On June 2, 2021, FINRA’s National Adjudicatory Council modified a FINRA’s Office of Hearing Officers decision from 2019 that was filed by FINRA’s Department of Enforcement against Titan Securities, Brad Brooks, and broker Richard Demetriou.   The modified order has resulted in a one-year suspension of Titan Securities’ CEO and owner Mr. Brooks.

The enforcement action arose out of alleged misconduct of Mr. Demetriou’s involvement with a private placement of preferred units in a limited partnership, RBCP Preferred, LLC (“RBCP”).  RBCP was organized by the owner of Mr. Demetriou’s previous member firm, who employed Mr. Demetriou to solicit investments from Mr. Demetriou’s previous firm, and Mr. Demetrious represented that RBCP was offered to them as a means of recouping those losses.   Mr. Demetriou recommended RBCP, made misrepresentations concerning the supposed collateral securing the investments, and told customers that an investment of 10 percent of their previous losses would result in recovery of their lost investments, plus a profit – alleged returns of more than 1,000 percent.  The investors did not recoup their losses but instead lost an additional $337,000 when RBCP failed, and the alleged collateral was not foreclosed.

FINRA’s National Adjudicatory Council made the following findings:

A FINRA Dispute Resolution Services arbitration panel in Richmond, Virginia, found Westpark Capital, Inc. to be liable for actions of its disgraced former broker, Lawrence Fawcett, and ordered the firm to pay nearly $800,000 to customers Charles and Karen Hailey.  The award included over $545,000 in compensatory damages, $33,500 in costs, and $215,000 in attorneys’ fees.    The arbitration panel found Westpark liable for failing to supervise Mr. Fawcett, who churned the Hailey’s accounts and made unsuitable investment recommendations.  The unsuitable investment recommendations related to private placement investments in the following entities:  Protagenic Therapeutics, Inc., Monster Digital, Inc., Miamar Labs, Inc.

The former stockbroker, Lawrence (Larry) Fawcett, was barred from the securities industry by FINRA in March 2018 for failing to cooperate with a FINRA investigation into his outside business activities.  FINRA subsequently revoked Mr. Fawcett’s securities license for failing to pay a fine and suspended him for failing to comply with an arbitration award.  Mr. Fawcett, who had only been in the securities industry for five years, had an extensive history of customer complaints, regulatory sanctions, associations with disreputable brokerage firms, and an employment termination after allegations of wrongdoing.

If you have lost money with Lawrence Fawcett or Westpark Capital, Inc., contact FINRA arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

FINRA has suspended International Assets Advisory, LLC broker Ronald Patrick Cameron from the securities industry for five weeks for engaging in an outside business activity without providing prior written notice to his firm. The suspension is scheduled to start on May 17, 2021, and end on June 20, 2021. Cameron was also fined $5,000.

If you have lost money with Ronald Patrick Cameron, or International Assets Advisory, LLC, contact FINRA arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

FINRA Letter of Acceptance, Waiver, and Consent (“AWC”)

The Financial Industry Regulatory Authority (“FINRA”) has barred stockbroker Michael Dellaporta, Jr. from the securities industry.  Mr. Dellaporta was expelled from the brokerage industry for refusing to cooperate with a FINRA investigation into an outside business activity.

Mr. Dellaporta, who was a broker for over forty years, most recently worked at B.B. Graham & Company, Inc. in Fort Lauderdale, Florida, from August 2018 to August 2019.  Previously, he was affiliated with Fusion Analytics Securities LLC, from 2015 until 2018, and Ameriprise Financial Services, Inc, from 2010 to 2015.

Since 2009, Mr. Dellaporta has been the subject of numerous customer disputes.

Iorio Altamirano LLP is currently investigating former MML Investor Services, LLC broker Oscar Francis, who reportedly recommended that his customers invest in private placement securities issued by GPB Capital. The GPB notes, which are private securities offerings exempt from registration with the Securities and Exchange Commission (SEC), are inherently risky investments.  These investments are suitable only for highly sophisticated investors who understand the risks and can afford a significant monetary loss.  Unfortunately, many brokerage firms and brokers sold the GPB Capital securities to retirees and unsophisticated investors because they paid a high up-front commission.

Mr. Francis was a broker at MML Investors Services, LLC, Inc. in Ft. Lauderdale, Florida, from July 2008 to May 2017. At that time, MML terminated his employment connected with an investigation into an undisclosed outside business activity, selling away, and an unauthorized non-securities life insurance transaction.  In August 2018, Mr. Francis pleaded guilty to wire fraud after admitting that between June 25, 2012, and May 31, 2017, he devised a scheme to defraud at least eleven investors out of approximately $665,000.  Mr. Francis was subsequently sentenced to 41 months in prison and ordered to pay over $420,000 in restitution to clients.   In May 2019, he was also barred by the SEC from association from associating with any broker, dealer, or investment advisor.

Iorio Altamirano LLP is also investigating the sales practices and due diligence of MML Investors Services, LLC related to its sale of GPB Capital funds.   It is believed, according to reports, that MML has been subjected to numerous lawsuits from customers in the form of FINRA securities arbitration claims to recover investment losses.

FINRA has suspended FMN Capital broker Jeffrey Stanga from the securities industry for 12 months for failing to fully disclose the nature of his outside business activities and for participating in private securities transactions without providing the required written notice to or receiving written approval from his firm.

Stanga was also fined $10,000 and consented to disgorgement of $28,359, plus interest, which Stanga received in referral fees in connection with these private securities transactions.

If you have lost money with Jeffrey Stanga, or FMN Capital, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

FINRA has barred former LPL stockbroker Bradley Allen Goodbred from the securities industry for refusing to respond to an information request issued pursuant to FINRA Rule 8210.

On February 1, 2021, LPL terminated Goodbred’s registration by filing a Form U5, stating that Goodbred had been terminated because he failed to disclose and obtain the firms’ approval to act as power of attorney for a customer, in violation of firm policy. LPL stated that as a power of attorney, Mr. Goodbred requested and facilitated distributions of funds from his customer’s outside advisory accounts and deposited the funds into the customer’s bank account. He then had the customer provide him with personal checks totaling $430,000. The checks were made payable to a real estate company representative owned and operated as an outside business activity. Goodbred and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on February 16, 2021.

FINRA indicated that the matter originated from a tip received by FINRA staff on January 13, 2021.

FINRA has suspended Stewart Schram from the securities industry for four-months for engaging in outside business activity and private securities transactions without firm approval. In addition to his suspension, Mr. Schram was also fined $7,500.

FINRA began its investigation after receiving a regulatory tip. Mr. Schram is no longer associated with any FINRA member but remains subject to FINRA’s jurisdiction.

If you have lost money with Stewart Schram, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

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