FINRA Finds George Kardaras and Brian Borakowski Sell Echo Canyon, LLC Away From Their Brokerage Firms

The Financial Industry Regulatory Authority (FINRA) recently entered a default decision against George Alexander Kardaras (Kardaras) and Brian Matt Borakowski (Borakowski) after having alleged that the two brokers perpetrated a Ponzi scheme.  FINRA found that the two solicited at least 12 customers over four years to invest more than $665,000 in total in Echo Canyon promissory notes.  The notes bore interest rates between 14 to 56 percent and had quarterly, semiannual, and annual maturity dates.

Kardas’ and Borakowski’s scheme involved soliciting customers to purchase promissory notes in Echo Canyon LLC, a limited liability company in Arizona.  Kardas and Borakowski told investors that their investment would be used to purchase used vehicles in U.S. auto auctions and shipped to Russia for re-sale.  FINRA determined that Kardaras and Borakowski never intended to use the customer funds as represented.  Instead, only two automobiles for EchoCanyon in or around late 2007 or early 2008 were actually purchased.

FINRA found that 95 percent of the funds raised, approximately $634,000 were used by the two brokers in order to pay personal expenses, to cover expenses at their employer firms’ branch office businesses, and to make payments to earlier investors in furtherance of the Ponzi scheme.

FINRA found that the two brokers had committed fraud in violation of Section 10(b) of the Exchange Act and Rule 10b-5, FINRA Rule 2020 (anti-fraud provision), FINRA Rule 2150 (misuse of funds), NASD Rule 3040 (selling away), and FINRA Rule 2010 requiring conduct meeting high ethical standards.

From 2005 through September 2011, Kardaras was a registered representative of J.P. Turner & Company, LLC.  Kardaras’ broker disclosures state that he is the president of Kardaras and Associated, LLC.  From August 2007 through September 2009 Borakowski was a registered representative of American Capital Partners, LLC.  Thereafter, until 2011, Borakowski was registered with Berthel, Fisher & Company Financial Services, Inc.

The attorneys at Gana LLP are experienced in investigating claims of financial abuse.  Our attorneys can help you detect and uncover suspicious activity in your accounts.  Our consultations are free of charge and the firm is only compensated if you recover.