Richard L. Brown, of Farmingdale, New York, a stockbroker formerly registered with Arive Capital Markets, has been suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon allegations that Brown failed to apprise FINRA staff of his compliance with a settlement agreement or customer initiated arbitration claim. Letter No. 15-02488 (Apr. 3, 2017).
In 2016, Brown was charged by the Securities and Exchange Commission (SEC) in a Complaint alleging that while he was associated with Chelsea Financial Services, he defrauded investors via a scheme to induce individuals’ investment in the stock of a certain entity based upon cash bribes paid to him from the entity’s chairman. Case No. 16-CV-02193 (May 3, 2016). The SEC alleged that Brown’s conduct was violative of Securities Exchange Act of 1934 Section 10(b), Rule 10b-5, as well as Securities Act of 1933 Section 17(a).
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that on December 29, 2015, a customer initiated investment related arbitration claim involving Brown’s conduct was settled for $125,000.00 in damages based upon allegations that Brown, while associated with Chelsea Financial Services, made unsuitable investment recommendations to the customer, and traded over-the-counter equities excessively in the customer’s account. On February 9, 2016, another customer initiated investment related arbitration claim regarding Brown’s activities was resolved for $33,000.00 in damages based upon allegations of unsuitability and excessive trading in reference to over-the-counter equity transactions effected in the customer’s account.
Moreover, on December 7, 2016, a customer was awarded $72,132.95 in damages according to an investment related arbitration claim involving Brown’s misconduct, based upon allegations that Brown made fraudulent misrepresentations to the customer, breached his fiduciary and contractual obligations, effected inappropriate options and equity transactions in the customer’s account, and churned the customer’s investment portfolio.
Brown’s registration with Arrive Capital Markets ended on May 6, 2016. Since November 19, 1999, Brown has been associated with eight different broker dealers, two of which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct.
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