Michael Todd Clements of Wellington Florida the former chief executive officer and co-owner of Avenir Financial Group is subject of a National Adjudicatory Council Decision which affirmed FINRA’s Hearing Panel’s bar of Clements from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to findings that Clements (1) made omissions and misrepresentations to customers concerning self-offerings and (2) failed to supervise the firm’s capital raising efforts.
According to the Decision, Clements omitted facts concerning customer NL’s purchase of Avenir equity interests. Particularly, Clements’ omissions to NL related to a purchase agreement wherein NL allocated $250,000.00 for the purchase of a five percent equity interest in Avenir. Apparently, the purchase agreement failed to disclose what NL’s funds would be used for, and did not detail Avenir’s sketchy financial situation. The Decision stated that Clements knew about Avenir’s problematic financial condition – namely, the fact that the firm was net capital deficient and faced a margin call and accompanying $190,000.00 liability. Clements reportedly failed to inform NL that NL’s funds would probably be utilized to prevent the firm from incurring another net capital deficiency.
The Decision also stated that Clements misrepresented and omitted facts concerning customer KK’s purchase of Avenir equity interests Apparently, KK was advised to utilize KK’s insurance proceeds to purchase an equity interest that Clements described as safe. Clements reportedly convinced KK that Avenir was growing and performing very well. The Decision stated that the two purchase agreements prepared for KK failed to inform KK about Avenir’s net capital issues and precarious financial state, and the agreements also failed to detail how KK’s funds would be utilized. The National Adjudicatory Council affirmed FINRA’s Hearing Panel’s holding that Clements violated Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5 and FINRA Rules 2010 and 2020.
FINRA Public Disclosure reveals that Clements is referenced in five customer initiated investment related disputes pertaining to accusations of his misconduct during the time that he was employed by Avenir Financial Group. Particularly, a customer filed an investment related arbitration claim regarding Clements’ conduct where the customer requested $110,000.00 in damages supported by allegations including suitability, excessive commissions, churning and unauthorized trading of stock and over-the-counter equities in the customer’s account. FINRA Arbitration No. 16-00035 (Dec. 27, 2015).
Subsequently, a customer initiated investment related arbitration claim involving Clements’ conduct was resolved for $255,000.00 in damages based upon accusations of poor performance relating to the customer’s equity and private offering transactions. FINRA Arbitration No. 15-00155 (Feb. 23, 2016). Clements has also been referenced in a customer initiated investment related arbitration claim in which the customer was awarded $133,989.04 in compensatory damages and $22,500.00 in punitive damages based on Clements having been found liable on the customer’s claims of forgery, theft, negligence, suitability, misrepresentation, manipulation, churning, breach of fiduciary duty, and unauthorized trading of equities in the customer’s investment portfolio. FINRA Arbitration No. 15-02744 (Mar. 22, 2017).
Moreover, Clements is subject of a customer initiated investment related arbitration claim where the customer was awarded $26,127.00 in compensatory damages based upon Clements having been found liable on the customer’s claims of breach of fiduciary duty, failure to supervise, margin abuse, and suitability. FINRA Arbitration No. 16-02935 (June 8, 2017).
Clements’ registration with Avenir Financial Group was terminated on August 9, 2016. FINRA expelled the firm on September 19, 2016. Clements has been associated with eighteen different broker dealers, twelve of which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct. #cockroach
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