David Todd Phillips (also known as Todd Phillips) of Gilbert Arizona a stockbroker formerly registered with Moloney Securities Co. and ProEquities Inc. has been fined $5,000.00 and suspended for nine months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based on findings that he engaged in private securities transactions involving structured cash flow investments. Letter of Acceptance Waiver and Consent No. 2018060312301 (Nov. 18, 2020).
According to the AWC, from May of 2017 to April of 2018, eight investors had been solicited by Phillips for purposes of investing in Future Income Payments LLC. The AWC stated that FIP held itself out as a company which provided its investors with a pension stream paying seven or eight percent returns. That company bought pensions from pensioners and then sold those pensions to investors. Eight customers of Phillips collectively invested $876,636.00 which enabled Phillips to make #$33,184.00 in commissions.
FINRA stated that Phillips was prohibited by both Moloney Securities and ProEquities from effecting private sales of securities unless he had written permission. Phillips was selling away as he did not provide any notification of the FIP transactions to his employing securities broker dealers. Phillips never received any written approval concerning his participation in those transactions. FINRA determined that Phillips’ activities were violative of FINRA Rules 2010 and 3280.
The AWC noted that FIP stopped doing business when it owed almost $300,000,000.00 in payments to investors. FIP and its founder Scott A. Kohn have been indicted for conspiring to engage in wire fraud and conspiring to engage in mail fraud.
FINRA Public Disclosure confirms that Phillips has been identified in two more customer initiated investment related disputes regarding allegations of his improper activities during the period that he was employed by ProEquities Inc. On August 9, 2019, a customer initiated investment related arbitration claim involving Phillips’ conduct was settled for $90,000.00 in damages based upon allegations that the customer had been sold an inappropriate structured cash flow investment by Phillips which caused the customer to suffer losses. The claim alleges that the customer’s Future Income Payments purchase had been misrepresented.
On October 20, 2020, another customer filed an investment related arbitration claim involving Phillips’ activities where the customer requested $95,000.00 in damages supported by allegations of bad annuities and Future Income Payments structured cash flows being sold to them. FINRA Arbitration No. 20-03524. According to the claim, the customer was not provided with accurate information from the stockbroker concerning investments made between 2017 and 2018.
Phillips was terminated by Moloney Securities on November 30, 2018 founded on allegations that he engaged in an outside business activity in violation of the securities broker dealer’s procedures and policies.
