Securities Industry Commentator by Bill Singer Esq

The complaint did not concern a sales practice violation or any other professional misconduct. It was an attempt to gain leverage in an unrelated family dispute. The underlying issue was a dispute between the customer's uncles and the Claimant's mother about the division of money in the Claimant's grandmother's estate. That money had no relationship to the Claimant or to his employment in the securities industry. In addition to being unrelated to the Claimant's professional conduct, I found (and the reviewing court found) the complaint to be meritless. In fact, the court awarded damages to the Claimant in a defamation suit against the uncles. Publicizing an unrelated and meritless complaint provides no benefit to the investing public.

[W]illiams was only authorized to sell New York Life related products and provide financial planning through a New York Life affiliate.  New York Life did not sell certificates of deposit (CDs) nor was Williams authorized to sell CDs.  New York Life authorized the use of "doing business as" entities (DBAs) for marketing purposes only and approved Williams' use of Mid-Atlantic Financial and Williams Investment Group as DBAs.  Williams was not permitted to have premiums made payable to him or his DBAs.

Williams admitted that from 2009 to 2015, Williams deceived New York Life and its customers, and fraudulently obtained more than $2.8 million.  At Williams' direction, customers paid money to entities with bank accounts that Williams controlled, including Advanced Retirement Solutions, Jonathan Williams Financial Planning, and Mid-Atlantic Financial.  Williams used the victim funds to make cash withdrawals, to pay personal and business expenses, to pay employees, to take vacations, and other miscellaneous expenses.

For example, Williams misrepresented to one small business that he was creating a defined benefit plan for the company's employees by purchasing life insurance, long-term policies, and other investments.  In 2015, after more than five years, the business learned that Williams never created the defined benefit plan.  In addition to the money that he took from the business, Williams caused New York Life and the small business to incur substantial costs to recreate the benefit plan and avoid arduous tax consequences stemming from Williams' illegal conduct. 

Further, Williams admitted that he provided a fake certificate of deposit account statements to another victim, but never invested the client's money.  That victim lost more than $350,000.  A third victim, who had spent more than 30 years in the U.S. Navy, invested $100,000 with Williams, supposedly for Williams to establish investment accounts with Fidelity.  Williams lied to the victim in e-mails, claiming that the victim's money was invested with Fidelity.  In fact, an account was never created for the victim at Fidelity and Williams used the victim's money for his personal enrichment. 

In March 2015, Williams provided phony bank records to New York Life after officials questioned Williams about his financial transactions with New York Life customers.  Even after he lost his license to sell insurance in May 2015, Williams continued to mislead clients, telling one client in July 2016 that he was leaving New York Life to work for another company.  New York Life subsequently terminated Williams' employment and paid to settle with the victims of Williams' fraud who suffered financial losses stemming from his illegal conduct.

[B]etween December 2015 and November 2017, Teixeira defrauded two New Hampshire investors by selling them a series of securities that she claimed were guaranteed to generate high rates of return.  Teixeira represented herself as a solicitor of high-yield investment funds with connections to investment groups raising funds associated with domestic and foreign real estate developments, who solicited financing through private investors rather than banks.  In fact, Teixeira's claims about being connected to high-level investment groups were false.  The investment contracts and notes she sold were worthless and they generated no returns.  Teixeira simply converted the invested funds to her own personal use and benefit, without returning any of the invested funds.  In total, the Teixeira obtained approximately $296,250 from the two investors.                     

This Notice reminds members of the Securities and Exchange Commission's (SEC's) adoption of a best interest standard of conduct for broker-dealers and a relationship summary (Form CRS) delivery obligation, and provides an SEC email address where members may submit questions about the new requirements. As more fully described below, the SEC encourages firms to actively engage with SEC staff as early as possible as questions arise when planning for implementation. Firms may send their questions by email to IABDQuestions@sec.gov. FINRA also will assist members in their implementation of the best interest standard in various ways.

• Securities Industry Commentator
• Bill Singer