The Financial Industry Regulatory Authority (FINRA) has filed a complaint against broker Darnell Deans (Deans) concerning allegations that while associated with Garden State Securities, Inc. (GSS), Deans willfully failed to amend his Form U4 documents to disclose three unsatisfied federal tax liens totaling approximately $254,995. FINRA also alleged that from in or about April 2011, through August 2011, Deans borrowed a total of $266,000 from two customers of the firm without seeking or obtaining the firm’s approval for the loans. In addition, FINRA alleged that in November 2011, Deans falsely represented to GSS in an Annual Attestation that he had not borrowed money from customers. Thereafter, in January 2012, FINRA alleged that Deans failed to disclose to GSS the extent of funds borrowed from two customers.
In January 1992, Deans first became registered with FINRA. From January 2005, through November 26, 2013, Deans was registered through GSS. On November 26, 2013, GSS filed a Form U5 terminating Deans’ registration stating that Deans was terminated due to management’s loss of confidence due to ongoing regulatory issues. Thereafter, Deans was associated with John Carris Investments LLC until June 2014. Currently, Deans is associated with brokerage firm BlackBook Capital LLC.
In addition to FINRA’s recent action, Deans has had three other regulatory actions filed against him, at least three customer complaints, and has one judgment and tax lien on record. These statistics are troubling because so many customer complaints, regulatory actions, and liens are rare. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. These disclosures do not necessarily have to include customer complaints but can include IRS tax liens, judgments, and even criminal matters. The number of brokers with multiple customer complaints is far smaller.
One of Deans’ regulatory actions was brought by the New Jersey Bureau of Securities. New Jersey suspended Deans from being licensed in the state of New Jersey for two and half years. The regulator alleged that Deans engaged in dishonest or unethical business practices in the securities industry by borrowing customer funds, by failing to disclose tax liens, and by filing false information with the state.
The customer complaints brought against Deans involve claims of suitability, misrepresentation, fraud, unauthorized trading, breach of fiduciary duty, and churning. Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana LLP are experienced in representing investors in cases of brokerage firms failure to supervise their representatives in the handling of customer accounts. Our consultations are free of charge and the firm is only compensated if you recover.