Kenneth Brownlee, a former registered representative with Athens, Georgia-based Allstate Financial Services, LLC (Allstate Financial), consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he made unsuitable investment recommendations to what was a fraudulent Ponzi scheme, causing his customers to lose their entire investments.
Kenneth Brownlee, of Buford Georgia, allegedly recommended that four of his Allstate Financial customers invest in Capital City Corporation (CCC), which turned out to be a classic Ponzi scheme using investor funds to pay for personal expenses and earnings to earlier investors. According to FINRA, Mr. Brownlee had no reasonable basis to believe that the securities associated with the CCC Ponzi scheme were suitable for his customers, all of whom had limited investment experience and were not sophisticated investors.
FINRAs findings state that the investments were not approved by his member firm and Mr. Brownlee neglected to get the advance approval from the firm to sell the investments. Mr. Brownlee allegedly denied engaging in private securities transactions on his firm’s annual compliance questionnaire. Consequently, Mr. Brownlee was permanently barred from association with any FINRA member in any capacity.
Stockbrokers and other financial industry professionals have been known to engage in many types of fraudulent and unlawful behavior, such as unsuitable investment recommendations, which violate industry rules and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of the rules requires supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors do not establish and implement these protective measures, they may be held liable to investors for losses flowing from the misconduct. As a result, investors who have suffered losses stemming from a broker or registered representative’s unsuitable recommendations can bring forth claims to recover damages against brokerage firms like Allstate Financial, which have a duty to supervise its employees in order to prevent broker misconduct.
Have you suffered losses in your Allstate Financial investment account due to your broker’s unsuitable or misrepresented investment recommendations? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Allstate Financial stockbrokers for unsuitable investment recommendations and other types of prohibited and/or fraudulent stockbroker misconduct.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.