FINRA Files Complaint Against Broker Dealer Firm’s Owner
By Bob Pepalis
Dings and marks are a bad thing in any industry, but for broker dealers they could point to bigger problems. Meyers Associates of New York appears to be a prime example of the problems shown by disclosure events.
Financial Industry Regulatory Authority (FINRA) has gone so far as to sue the firm’s owner and CEO, Bruce Meyers, over allegations of improper marketing of SignPath Pharm Inc. The FINRA complaint said that the company has had no revenue, according to a report in Investment News.
Securities Lawyers Blog said that Meyers Associates, through its chief executive, allegedly made exaggerated claims of price performance and omitted facts. Those facts included failing to disclose that Meyers and another firm executive were majority owners in SignPath Pharma.
Meyers has 11 disclosure events on his record at FINRA BrokerCheck, including two that are pending, the blogger said.
A broker dealer can’t make a general solicitation of a private placement or limited partnership. Those securities can be sold to sophisticated investors with whom they have a long-standing relationship. But that wasn’t the case in the SignPath Pharma offering to more than 1,000 email addresses, according to the complaint against Meyers.
Investment News reported in March that 47 Meyers Associates representatives out of the 75 who were registered at the time had some type of disclosure event on their records.
Many firms have some type of disclosure event on their FINRA BrokerCheck reports. But when more than half of the representatives have something on their records and the firm has a record of censures and fines, how can clients build a rapport and trust with their financial adviser?
Do you advise your potential clients to check your record on FINRA’s BrokerCheck? As a client, have you done your own due diligence in checking out your broker’s history?