Securities Lawyers Blog
Previously financial advisor Mario Divita (Divita), previously employed by brokerage firm Traderfield Securities INC. has been subject to at least 3 disclosable events. These events include one customer complaint, 2 regulatory events. 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 September 05, 2023.
Without admitting or denying the findings, the firm and Divita consented to the sanctions and to the entry of findings that they failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with rules governing registered representatives proposed OBAs. The findings stated that the firm and Divita knew that two of the firm’s representatives were engaged in outside activities that involved investment funds and private placement offerings, but neither the firm nor Divita evaluated the activities to determine whether they constituted outside securities activities. The representatives owned and received a fee for managing investment funds that raised $60 million from over 200 individual investors. The representatives presented the investment funds to the firm and Divita in discussions and emails as OBAs, so they understood that the representative’s OBAs were investment-related. However, neither Divita nor anyone else at the firm evaluated the representative’s proposed activities to determine whether they should be restricted or prohibited; whether they should have been treated as outside securities activities, with any transactions recorded on the firm’s books and records; and whether they would interfere with or otherwise compromise the representatives’ responsibilities to the firm or the firm’s customers, or be viewed as part of the firm’s business. In addition, the firm’s WSPs did not reference or otherwise require the firm to comply with the requirements of FINRA Rule 3270.01 or the factors listed there.