Previously financial advisor Blake Levy (Levy), previously employed by brokerage firm Joseph Gunnar & CO. LLC has been subject to at least one disclosable event. These events include one regulatory event. According to a BrokerCheck reports most of the recent customer complaints concern either corporate debt securities or alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.
FINRA BrokerCheck shows a final customer complaint on June 20, 2023.
Without admitting or denying the findings, Levy consented to the sanctions and to the entry of findings that he recommended that customers purchase membership interests in two funds for $2,260,299 through two private placement offerings, without having a reasonable basis to make those recommendations. The findings stated that Levy did not perform reasonable diligence on the funds before recommending them to customers and failed to understand the risks related to the investments. This failure stemmed, in part, from Levy’s negligent review of the offering materials, which was cursory and only aimed at giving himself a high-level understanding of the offering terms. The findings also stated that Levy made negligent omissions in connection with the sale of membership interests in the funds, in violation of FINRA Rule 2010, both independently and in contravention of Section 17(a)(2) of the Securities Act of 1933. When he sold membership interests in the funds to customers, Levy negligently failed to inform them about his role in the management company that managed the funds and the sources of his potential compensation. Levy also used offering materials that did not disclose these material facts. Levy was one of two equal owners in the management company that managed the funds and, in that capacity, was entitled to compensation from three sources: the management fees, the placement agent fees, and the performance fees. Neither the offering materials nor Levy disclosed that these fees would not be paid entirely to the placement agent, but instead would be divided among the placement agent, the management company, and the selling broker. Levy, by virtue of his role in the management company and as a selling broker, was entitled to receive a portion of the placement agent fees. Because Levy never fully reviewed the offering materials, he was incapable of correcting the omissions therein.
Securities Lawyers Blog
