Securities Fraud Lawyer Blog

Jeff Daggett of Temecula, California submitted an AWC in which he was assessed a deferred fine of $20,000 and suspended from association with any FINRA member in any capacity for four months. Without admitting or denying the findings, Jeff Daggett consented to the sanctions and to the entry of findings that he recommended unsuitable transactions in an exchange-traded note (ETN), and leveraged and inverseleveraged ETFs (non-traditional ETFs) in the accounts of his customer. The findings stated that Jeff Daggett recommended the ETN and non-traditional ETFs without having reasonable grounds for believing that the securities were suitable for the customer in view of the customer’s financial situation, investment objectives and needs. The customer’s realized and unrealized losses from investing in the ETN and non-traditional leveraged ETFs were approximately $88,099.75.

The suspension is in effect from July 6, 2015, through November 5, 2015. (FINRA Case

#2012035383801)

FINRA RULE

3280. Private Securities Transactions of an Associated Person

Bradley Claus (CRD #5127951, Castle Rock, Colorado) was barred from association with

any FINRA member in any capacity. The sanction was based on findings that Claus

misrepresented material facts in connection with the sale of securities in emails he sent

Raymond Dickie Dick Adcock of Cabot, Arkansas submitted an AWC in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Dick Adcock consented to the sanction and to the entry of findings that while working as a registered representative for a member firm, he misappropriated $10,000 in proceeds generated from a private placement offering done by an unregistered investment adviser. The findings stated that Dick Adcock misappropriated the funds by drafting a $10,000 check, made payable to cash, from the unregistered investment adviser’s bank account and converted the funds for his personal use. (FINRA Case #2015044253401)

Dick Adcock’s registration and disciplinary history

Dick Adcock was registered with the following firms

Ascendiant Capital Markets of Irvine, California submitted an Offer of Settlement in which the firm was censured and fined $20,000.  Without admitting or denying the allegations, the firm consented to the sanctions and to the entry of findings that it failed to timely update registered representatives’ Forms U4 to reflect Wells notices that they were the subjects of FINRA investigations. The findings stated that Ascendiant Capital Markets also failed to timely update a registered representative’s Form U4 to reflect that the representative was subject to an Internal Revenue Service (IRS) tax lien. The findings also stated that the firm failed to timely report a complaint and subsequent arbitration claim made against the firm and one of its registered representatives to FINRA. The customer claimed that certain trades were unauthorized and made a demand for damages. The findings also included that Ascendiant Capital Markets did not have adequate written procedures and it failed to implement its supervisory system adequately with regard to customer-complaint reporting and Form U4 disclosure. (FINRA Case #2010023220507)

Ascendiant Capital Markets’ registration and disciplinary history

Ascendiant Capital Markets is registered with the SEC, five SROS and in 27 states.

FINRA RULE

The Securities and Exchange Commission announced that on June 2, 2015 the federal court in Rhode Island entered an order imposing an asset freeze and other preliminary relief against the defendants ClearPath Wealth Management, LLC, a private funds investment adviser, its president and owner, Patrick Churchville, and the relief defendants ClearPath Multi-Strategy Fund I, L.P., ClearPath Multi-Strategy Fund II, L.P., and ClearPath Multi-Strategy Fund III, L.P. (Multi-Strategy Funds). The Commission filed charges on May 8, 2015 against ClearPath and Patrick Churchville as defendants for operating a fraudulent scheme that the SEC alleges resulted in at least $11 million in losses to investors. The Multi-Strategy Funds and the HCR Value Fund, L.P. were named as relief defendants..

According to the SEC’s complaint, from at least December 2010, ClearPath and Patrick Churchville diverted deposits from new investors to pay prior investors, used proceeds from selling particular investments to pay unrelated investors, used investors’ funds as collateral for loans to make investments for their own benefit, used other investors’ money to repay the loans, converted investor funds into investments for ClearPath’s own benefit, and stole $2.5 million of investor funds to purchase Patrick Churchville’s waterfront home in Barrington, Rhode Island. The complaint alleges that Churchville and ClearPath used a variety of deceptive acts and misleading accounting tricks to conceal their fraud, and then prolonged the scheme by lying to investors about the status, worth, and disposition of those investments.

Patrick Churchville’s registration and disciplinary history

On March 3, 2015 Norma Skeete of Arlington, Virginia, a former broker with PFS Investments of Camp Springs, MD was named in a FINRA complaint alleging that she made negligent misrepresentations to a PFS customer in connection with a loan that the customer made to a real estate company.

The complaint alleges that Norma Skeete failed to properly investigate the real estate company to verify the risks of the investment, and instead relied solely on the representations of the company’s officers. As a result, Skeete did not have a reasonable basis to recommend the investment. After the loan was made the customer sought updates, and when he wasn’t repaid on the loan Skeete reaffirmed that he would be repaid. As of the time of the filing of the complaint the customer had not been repaid.

Norma Skeete was a long time registered representative, and was licensed in the securities industry from 1983 – 2011.

On February 9, 2015 FINRA barred Michael Korson from the securities industry as a result of findings that Korson engaged in outside business activities in violation of FINRA rules.

Michael Korson’s bar relates to his sale of My Coupon Genie stock, which was a private securities transaction. FINRA found that Korson sold convertible debentures to his brokerage firm customers without obtaining permission from the firm.

Michael Korson had been licensed in the securities industry for 22 years, and was with PFS Investments from 1991- 2013. FINRA records show that Korson was permitted to resign from PFS Investments after the firm became aware of his sale of the My Coupon Genie securities to a firm customer. After leaving PFS, Michael Korson was briefly licensed with HBW Securities of South Lyon, Michigan before accepting a permanent bar from FINRA.

Michael Ciuffo, formerly of Sikich Corporate Finance of Naperville Illinois was suspended by FINRA for six months, form May 2015 through November, 2015. Michael Ciuffo consented to the suspension without admitting or denying that he participated in two private securities offerings without getting written permission from his broker dealer.

The FINRA findings also state that Michael Ciuffo falsely represented to his broker dealer that he was not engaging in these outside business activities a/k/a “selling away.

Michael Ciuffo has been licensed through FINRA since 1993 and this is the second regulatory action brought against him by FINRA.