Conrad Huss of Airmont, New York submitted an Offer of Settlement to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly misrepresenting material facts in the sale of promissory notes. Mr. Huss first became associated with FINRA through a member firm in November 1989. From January 15, 2005 through October 31, 2006, Mr. Huss was a registered representative with du Pasquier & Co., Inc. (DPC).
While associated with DPC, FINRA found that Mr. Huss made misrepresentations in the solicitation and sale of $1.4 million worth of promissory notes in a private offering to 14 DPC customers. According to FINRA, the notes were issued by Economic Development Finance Corporation (EDFC), a Massachusetts real estate development company. After the offering (between March 2006 and August 2006) EDFC defaulted under the EDFC Notes and failed to pay DPC’s customers the principal due. This resulted in significant losses for many of the DPC customers.
FINRA alleged that Mr. Huss negligently misrepresented to customers that the EDFC Notes were fully secured by EDFC’s pledge of proceeds from the sale of certain historic rehabilitation tax credits (HRTCs). FINRA found that Mr. Huss falsely stated that the notes were secured by proceeds from the HRTCs when in reality, there was no collateral for the EDFC notes. My. Huss allegedly made these misrepresentations and false statements to illegitimately refer DPC clients.
FINRA found, in allegedly committing the above acts, Mr. Huss negligently made an untrue statement of a material fact in violation of the Securities Act of 1933 and NASD Conduct Rule 2110. Without admitting or denying the FINRA findings, Mr. Huss agreed to the FINRA sanctions and was suspended from association with any FINRA member in any capacity for two years. In addition, FINRA ordered Mr. Huss to pay a $20,000 fine.
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 such as du Pasquier & Co. 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, such as du Pasquier & Co. 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 du Pasquier & Co., which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your du Pasquier & Co. 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 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 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.