According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker David Rockwell (Rockwell), previously associated with Cetera Advisor Networks LLC, has at least 2 disclosable events. These events include one customer complaint, one regulatory event, alleging that Rockwell recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on July 15, 2021.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (‘Exchange Act’) and Section 203(f) of the Investment Advisers Act of 1940 (‘Advisers Act’) against David Aaron Rockwell (‘Respondent’ or ‘Rockwell’).\<char_lb_r>\, \<char_lb_r>\, After an investigation, the Division of Enforcement alleges that Rockwell is a resident of Cape Coral, Florida. During the period of the misconduct described below, Rockwell was associated with two dually-registered broker-dealer and investment adviser firms, in Fort Myers, Florida-one from December 2015 through approximately November 2018 and the other from November 2018 through approximately June 2019. Rockwell also formed, owned, and operated Gralyn Financial Services LLC (‘Gralyn’), purported to be a financial service firm. From 2000 through 2015, Rockwell was associated with other broker-dealers registered with the Commission. In February 2020, FINRA barred Rockwell from association with any FINRA member in any capacity for failing to respond to a FINRA request for information. See FINRA case No. 2019062440602.\<char_lb_r>\, \<char_lb_r>\, On September 9, 2020, Rockwell was indicted on six counts of wire fraud in violation of Title 18, United States Code, Section 1343, and two counts of bank fraud in violation of Title 18, United States Code, Section 1344. On January 13, 2021, Rockwell pled guilty to the entire indictment (without a plea agreement) before the United States District Court for the Middle District of Florida, in United States v. David Aaron Rockwell, Case No. 2:20-cr-107, and the Court accepted his plea and adjudicated him guilty on January 21, 2021. On June 1, 2021, Rockwell was sentenced to 63 months in prison and forfeiture of $1,018,000.\<char_lb_r>\, \<char_lb_r>\, In connection with his plea, Rockwell admitted that beginning in October 2017, Rockwell began to convert and misappropriate monies belonging to his clients. Specifically, he applied for and obtained two lines of credit at a bank in the total amount of $700,000 in his clients’ names without their knowledge or permission, using his clients’ assets as collateral. Rockwell caused the bank to transfer the loan proceeds to an account at another bank in the name of his clients but that Rockwell controlled. Between November 2017 and July 2018, he wrote checks on this bank account payable to Gralyn totaling approximately $695,000, which he deposited into a Gralyn account he controlled. Rockwell used approximately $400,000 of the misappropriated funds to purchase a home in Fort Myers, FL with his then girlfriend.\<char_lb_r>\, \<char_lb_r>\, In connection with his plea, Rockwell further admitted that he also convinced a client to invest in a real estate company, which Rockwell touted as a great opportunity to invest in low income housing in Florida. In the Fall of 2018, Rockwell duped the client into providing Rockwell with $418,000 for the purpose of making certain real estate investments. However, Rockwell used at least $318,000 of the money for his own benefit (including paying credit card bills) rather than the intended use of real estate investments. He also bought Harley Davidson products and used funds to buy a home in Cape Coral, Florida in Gralyn’s name.\<char_lb_r>\, \<char_lb_r>\, In view of the allegations made by the Division of Enforcement, the Commission deems it necessary and appropriate in the public interest that public administrative proceedings be instituted.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $2,000,000.00 on September 24, 2020.
Claimant alleges their registered representative obtained loans in their name that were secured by their brokerage accounts without authorization.
In the financial industry advisors must meet the requirements of the SEC’s Regulation Best Interest (Reg BI) in providing investment advice and services. Reg BI established a ‘best interest’ standard for brokerage firms and registered representatives. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. This standard applies when a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts.
The care obligation also requires the broker to address the client’s specific needs through obtaining specific investment profile information on the client. The associated person typically will ask the customer for information such as the investor’s risk tolerance or ability to withstand account value declines or increases; experience with investments available; investment objectives and goals; investment time horizon; liquidity needs; assets such as investment accounts held at other financial institutions; tax information; their age and retirement plans; and other information that a customer may want to provide to the advisor to help them to properly address the services needed. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest. Reg BI comes with different core obligations that brokers must comply with. There is the duty of care obligation requiring financial advisors to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest among other duties. In order to do that the broker must evaluate the potential risks, rewards, and costs associated with a product, account type, or series of transactions being recommended.
Next, the broker must understand the investor’s investment background and profile. A customer’s profile includes information that describes the investor’s financial situation and needs. Information here will include their outside securities accounts and investments; relevant assets and debts; tax bracket; age; liquidity needs; risk tolerance; investment time horizon; experience with investing; investment objectives; and any other relevant information that the investor may choose to disclose pertinent to their situation. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided is in the retail investor’s best interest. Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Rockwell has been in the securities industry for more than 17 years. Rockwell has been registered as a Broker with Cetera Advisor Networks LLC since 2015.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.