Advisor Todd Esh Barred By SEC Over BirdDog Investment Fraud – Investor Recovery Options

shutterstock_173864537-300x200The law offices of Gana Weinstein LLP are currently investigating claims that advisor Todd Esh (Esh) has been accused by a financial regulator of engaging in the fraudulent sale of securities among other allegations.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Esh was employed by his prior employer LPL Financial LLC (LPL Financial) prior to being investigated concerning his activities.  If you have been a victim of Esh’s alleged misconduct our firm may be able to assist you in recovering funds.

In April 2020, The SEC brought an action in the U.S. District Court for the Western District of Missouri, Western Division against Todd Esh and others.  The SEC alleges that the defendants engaged in a fraudulent securities offering orchestrated by Phillip Hudnall, with help from Esh, operating through BirdDog Business, LLC and BirdDog Oil Equipment entities that Hudnall and Esh founded and controlled.  According to the SEC, Hudnall and Esh raised more than $3.6 million by selling promissory notes issued by BirdDog to investors.  Esh and other allegedly promised that they would use investor funds to buy and refurbish used oil and gas equipment which BirdDog would then resell at a profit.  However, the SEC claims that Hudnall misappropriated most of investors’ money and squandered the rest on a bogus equipment deal.

The SEC claims that the defendants promised that the notes would pay a 30% return after just nine months to investors and also emphasized the safety of the investment, promising investors that their principal would be secured by a first priority security interest in specific oil and gas equipment. Hudnall and BirdDog further assured investors, according to the SEC, that they had experience and had done these sorts of transactions before. In offering materials provided to investors the defendants highlighted two purportedly profitable equipment transactions that they had already completed.  But the SEC determined that these representations regarding previous deals were lies and, the two completed transactions described in BirdDog’s term sheet were fake. In addition to misrepresenting their experience, the SEC found that defendants were not using investor funds as promised. In fact, the SEC claims that defendants made only one attempt at investing BirdDog’s funds as promised ending in a spectacular failure.

Esh’s disclosed outside business disclosures include Good Life Financial Adivsors, Good Life IA, GL Akc, LLC, and Good Life Advisors.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs.  The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws.  In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm.  Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion.  In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public.  Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system.  Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

In cases of selling away the investor is unaware that the advisor’s investments are improper.  In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.

Esh entered the securities industry in 1997.  From January 2008 until October 2015 Esh was associated with Waddell & Reed.  From October 2015 until November 2017 Esh was registered with Park Avenue Securities LLC.  Finally from March 2018 until July 2019 Esh was registered with LPL Financial out of the firm’s Shawnee, Kansas office location.

Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors may be able recover their losses through securities arbitration.  The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives.  Our consultations are free of charge and the firm is only compensated if you recover.

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