Ronald Paul Rafaloff, a former registered representative with the Bakersfield, California branch of Liberty Partners Financial Specialists, LLC (Liberty Partners) submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he converted $168,000 of an elderly customer’s investment funds for his personal use and benefit.
According to FINRA, Ronald Rafaloff’s only client, a 74 year old retiree, invested $405,000 of her retirement money into three speculative business entities. The business entities, for which Mr. Rafaloff claimed to provide consulting services, were actually founded and controlled by Mr. Rafaloff. In order to persuade his elderly client to invest, Mr. Rafaloff allegedly promised annual returns of 30-40% and a repayment of her principal in three years. He also allegedly provided the elderly investor with written guarantees against losses, agreeing to personally make payments to the investor if the business entities should default. FINRA found that none of the companies held sufficient funds to cover the return of principal or the high rates of returns promised by Mr. Rafaloff.
FINRA found that once the elderly investor demanded payment from Mr. Rafaloff because the companies stopped making payments of her investment principal, Mr. Rafaloff refused to make any payments to her. Further, Mr. Rafaloff allegedly never informed Liberty Partners that he was engaging in private securities transactions nor did he seek or receive the firm’s approval to participate in outside business activities. Consequently, Ronald Paul Rafaloff, of Ridgewood, New York, was 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 behavior, such as converting client’s funds. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a reasonable supervisory system. These rules require 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 brokerage firms and their supervisors do not establish and implement these protective measures, they may be held liable to account holders for losses flowing from the misconduct. As a result, investors who have suffered losses due to a broker or registered representative’s conversion or other fraudulent and unlawful misconduct can bring forth claims to recover damages against broker-dealers like Liberty Partners Financial Specialists, which have a duty to supervise its employees in order to prevent the above-described misconduct.
Have you suffered losses in your Liberty Partners Financial Specialists investment account due to your stockbroker’s fraudulent and/or unlawful 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 Liberty Partners Financial Specialists brokers for conversion of funds, mismanagement of accounts, and/or other unauthorized, fraudulent 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 33 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 email@example.com, 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.