The Financial Industry Regulatory Authority (FINRA) has filed a complaint against broker Jamie Diaz (Diaz) concerning allegations that form December 2009, through November 2011, Diaz engaged in securities fraud through deceptive and manipulative devices to convert approximately $850,000 from four customers. FINRA alleges that Diaz also converted $50,000 from a registered representative who worked with Diaz’s at National Securities Corporation (“National Securities”).
According to FINRA, Diaz told customers that their funds would be used to invest in two new restaurants in New York City and told another customer that the funds would be invested in real estate in New York City and a resort in Bermuda. However, FINRA alleged that Diaz did not invest the funds as he had represented to his customers. Instead, FINRA alleges that Diaz converted the funds for his personal use including to paying expenses related to his branch office business and to pay earlier investors.
Diaz first became employed in the securities industry in November 2000. Thereafter, from 2003 through 2007, Diaz was registered with GunnAllen Financial, Inc. (“GunnAllen”). From July 2007 through December 2011, Diaz was associated with National Securities. According to Diaz’s BrokerCheck Diaz was also associated with or employed by Worldwide Asset Protection, an insurance and estate planning company, Worldwide Wealth Management, Worldwide Asset Management, The Water Initiative LLC, and Nuela Restaurant LLC.
In 2011, National Securities filed a Form U5 terminating his registration. On June 27, 2012, National Securities filed an amended Form U5 disclosing a customer complaint by customer alleging that Diaz engaged in conduct actionable under applicable federal securities laws and regulations and the rules of FINRA. In addition, Diaz’s BrokerCheck shows that at least five customers have filed complaints against Diaz and that the broker has been subject to at least two civil court judgments totaling nearly $500,000. Many of Diaz’s customer complaints concerns his activities while at GunnAllen and involve claims concerning equities trading.
FINRA alleged that beginning in around December 2009, Diaz solicited four customers and a co-worker to invest money in three separate business ventures: (1) Nuela Restaurant; (2) Nordica Development; and (3) Marca Restaurant. FINRA alleged that at least some customer funds intended for Diaz’s businesses were made out to Diaz’s company Worldwide Asset Protection. FINRA also alleged that Diaz failed to deliver any evidence of certain customer’s equity investments in Nuela.
FINRA found examples of Diaz writing checks out of accounts meant for Diaz’s businesses that were made payable to himself, thus converting client investment funds. FINRA also alleged that Diaz converted customer funds for his personal use and made payments to earlier investors. In another instance FINRA found that upon Diaz’s recommendation and advice, another customer borrowed $75,000 against the securities held at National Securities and sent instructions to the customer to allow Diaz to take possession of the funds.
FINRA also alleged that in about mid-2010, Diaz became involved with Nordica Development. Nordica was to develop a new housing project in New York and to develop a resort community in Bermuda. FINRA alleged that Diaz personally invested $70,000 in Nordica and solicited investors to invest in Nordica. According to FINRA, Diaz failed to tell customers that he had not received any financial data for Nordica, that the developers were having difficulty getting permits to begin construction, or that he had not conducted any due diligence on the principal investors who were responsible for completing the project. Further, FINRA alleged that Diaz did not actually invest customer funds in Nordica. Instead, Diaz misappropriated customer funds for his personal use and used the funds to make a payment to an earlier investor.
FINRA also found that Diaz solicited two customers and a co-worker to invest in Marca Restaurant in or around late 2010. Marca was purportedly a second restaurant venture and was intended to be an Argentinian steakhouse with an underground nightlife space. According to FINRA, Diaz personally invested $800,000 in Marca. According to FINRA, in or about January 2011, Diaz solicited a registered representative with National Securities to invest $50,000 in Marca by telling the broker that he was an owner of Marca and that by investing in the restaurant. However, Diaz was not an owner in Marca and was not authorized to make any representations on behalf of Marca to sell an equity interest in Marca.
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