Spire Securities’ CEO David Blisk Makes False Statements After Panel Awards $3 Million Against Him

dreamstime_s_24782834-258x300The law offices of Gana Weinstein LLP represents a group of 23 claimants that have been awarded $3 million by a FINRA arbitration panel after 18 days of hearing and litigation that stretched over three years.  At hearing the evidence showed that Spire Securities, LLC (Spire Securities) and the firm’s principal officers including its CEO David Blisk (Blisk) and CCO Suzanne McKeown (McKeown) failed to supervise their registered representative Patrick Churchville (Churchville).

Despite the overwhelming evidence of the firm’s failure to supervise Blisk continues to defend his conduct instead of instituting necessary reforms to his practice.  In addition, Blisk has made several false statements of fact to the media in his continuing attempts to exonerate himself and his firm.

Blisk told AdvisorHub “’We think the award is outrageous and inappropriate,’ said Blisk, noting that the majority arbitrators appeared to ignore the firm’s claims that the Ponzi scheme began after Churchville left Spire in 2011. “We can’t supervise after somebody leaves us, and we don’t have to be fraud investigators.”

False on all counts.  First the only thing that is outrageous is that Blisk and Spire Securities could not produce a single opening account form, subscription agreement, or account statement for any of the 23 claimants who invested over $10 million in Churchville’s fraud on Spire Securities watch.  Claimants repeatedly asked Respondents to provide any evidence that the firm monitored Churchville’s activities for supervision without response.  Blisk had no evidence that Claimants investments, which were overconcentrated in private equity funds, was suitable.  Further, Respondents did not even know what Churchville’s funds were invested in and claimed that brokerage firms can blindly approve products that they have no understanding of.

Finally, Blisk falsely claims that Churchville did not commit fraud on Spire Securities watch.  Claimants proved that Churchville directed and ordered the theft of over $900,000 from one of the Claimants over Spire Securities’ email servers.  In addition, Claimants introduced numerous emails that showed $750,000 had been stolen from the private equity funds while Churchville fraudulently told investors the same investment was producing fantastic returns.  Claimants also showed that Chuchville stole over $200,000 in investor funds to pay administrative expenses that had been overdue for over a year after the service provider questioned whether Churchville was going out of business.  Finally, Claimants produced evidence that Churchville’s auditor had concerns over the private equity fund’s valuation and could not find evidence to back up Churchville’s claimed returns.

Blisk told AdvisorHub “Only eight of Churchville’s investors who brought claims were Spire clients, and they made money by investing solely in Treasury strips, according to Blisk.”

False.  In December 2016 Spire Securities sued FINRA and Director of FINRA arbitration claiming that Claimants were not customers of Spire Securities.  See Spire Securities, LLC v. FINRA, et al, No. 16-cv-9507 (S.D.N.Y.).  A federal judge determined:

THE COURT: But you’re still stuck with the fact that the claimants are clients of a broker that was an associated — I’m sorry. Whether he was acting as a broker and investment advisor doesn’t matter. The point is Churchville is an associated person of Spire, Spire had a duty to the supervise.

[Spire Securities’ Counsel]: Churchville did not have a customer relationship at Spire with these investors. The customer relationship is the part that’s being lost here.


THE COURT: You’ve got a customer of an associated person, you have a duty to supervise. Your client has a duty to supervise. Again, maybe, I don’t know what the underlying facts are about what Spire did. That doesn’t matter. The point you’re arguing that this is not arbitrable when you have acknowledged the core fact, which is that Churchville was an associated person of Spire, and the claimants are clients or customers of Churchville. So I get it that Spire would prefer to be able to put distance between it and Churchville, but the FINRA rules don’t allow you to do that.

Yet, Blisk continues to assert the meritless argument that he should not supervise Churchville’s securities activities to the media and that Claimants weren’t customers of the firm.  Blisk has not learned anything from this arbitration is likely to put his clients in harm’s way in the future.

Blisk told AdvisorHub We were kind of the last man standing, and the lawyers found a group of people to come after us,” he said. “Most of them had never heard of Spire Securities…”

Blisk continues the same victim and lawyer blaming that he exhibited at trial.  Blisk has repeatedly claimed that the case was a personal “assault” on him concocted by “the lawyers.”  Blisk even accused one of the Claimants as being part of Churchville’s Ponzi scheme.  Blisk will go to any lengths to deflect blame on others for his own personal failings.

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.

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