|
The Financial Industry Regulatory Authority (FINRA) has suspended Pinnacle Partners Financial Corporation, of San Antonio, TX, and its President, Brian K. Alfaro, for violating FINRA Temporary Cease and Desist Order prohibiting fraud in connection with the sale of certain oil and gas joint interests.
FINRA Chief of Enforcement, said, "Brian Alfaro and Pinnacle pose a serious risk to the investing public. Even after the issuance of a Temporary Cease and Desist Consent Order, Alfaro and Pinnacle continued to market oil and gas offerings through material misrepresentations, with the intent to deceive investors."
FINRA alleged that Alfaro and Pinnacle operated a "boiler room" in which brokers placed thousands of cold calls on a weekly basis to solicit investments in oil and gas drilling joint ventures that Alfaro owned or controlled.
The complaint further asserts that Pinnacle raised more than $10 million from over 100 investors, and that Alfaro diverted some of the customer funds for unrelated business and personal expenses.
FINRA also found that Pinnacle and Alfaro included numerous misrepresentations and omissions in the investment summaries for the offerings, including grossly inflated natural gas prices, projected natural gas reserves, estimated gross returns and estimated monthly cash flows.
Pinnacle and Alfaro deliberately attempted to mislead investors by deleting unfavorable information from well operator reports and providing them with doctored maps, which omitted numerous dry, plugged or abandoned wells near their projected drilling sites.
Also, according to the complaint, Alfaro's misuse of customer funds included attempts to retain the grossly inflated "drilling costs," which were funds Alfaro obtained by convincing customers to allow him to transfer their money into other fraudulent offerings. In another instance, Alfaro collected more than $500,000 in subscription costs for a well that was never drilled, and used those funds for unrelated personal and business expenses.
Nicholas J. Guiliano, Esquire, Guiliano Law Firm, P.C. Practice limited to the representation of investors in arbitration claims against stockbrokers for fraud, the sale of unsuitable investments, breach of fiduciary duty, failure to supervise. National Practice. Contingent Fee. Free Consultation. (877) SEC-ATTY.
|
