The Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) filed a complaint against George Zedan, of Whittier California, for allegedly converting a client’s funds for his own personal use. Mr. Zedan entered the securities in 1998 and later in April 2004, when he became associated with FINRA member firm LPL Financial, LLC (LPL). Mr. Zedan remained associated with LPL until March 2013 when he resigned from the firm while under police investigation.
FINRA alleges that Mr. Zedan, while associated with LPL, took advantage of an elderly client by using their funds for his own personal use. FINRA also alleges that Mr. Zedan proposed a false and inappropriate real estate investment strategy for an 87 year old client. According to the complaint, Mr. Zedan in 2012, started to discuss a $300,000 investment in a real estate venture with the client, none of which was put down on paper. After agreeing to the proposition, the client allegedly, under the direction of Mr. Zedan, wrote a personal check for $300,000 and with the memo line reading “real estate” and handed it to Mr. Zedan. A week later, September 4, 2012, Mr. Zedan deposited the check into his personal banking account and started using the funds for his own personal expenses.
FINRA alleged that by September 13, 2012, $17,000 of the client’s funds were used by Mr. Zedan for personal expenses rather than the alleged real estate investment. While the client claimed Mr. Zedan promised 18% in profit from a $300,000 investment, Mr. Zedan claims the check was a loan. After being under investigation for the alleged converted funds, Mr. Zedan reimbursed the client the full $17,000 and the remaining $283,000 was transferred back to the client. According to FINRA, Mr. Zedan was not prosecuted due to the death of the victim.
On several occasions in 2014, FINRA requested documents and copies of relevant information for the ongoing FINRA investigation. Mr. Zedan has not complied with any of the requests and FINRA is requesting that a permanent bar from the industry be imposed upon him pursuant to Rule 8210 for failure to cooperate with the FINRA investigation.
Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures. In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers to establish and implement a reasonable supervisory system. The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firm’s own policies and procedures. If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct. As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like LPL Financial, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your LPL Financial investment account due to your stockbroker’s misconduct? 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 LPL Financial stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and prohibited conduct.
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, and/or visit our website for answers to any of your questions about this blog post and/or any related matter.