The 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.