Dennis Allen Hayes of Boca Raton Florida a stockbroker formerly employed by Newbridge Securities Corporation has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to a FINRA Office of Hearing Officers Order Accepting Offer of Settlement containing findings that (1) Hayes engaged in private securities transactions while associated with the firm and (2) Hayes failed to cooperate in a FINRA investigation into allegations of him selling away from the firm. Department of Enforcement v. Dennis Allen Hayes Disciplinary Proceeding No. 2016050883001 (Mar. 22, 2019).
According to the Decision, from March of 2010 to June of 2016, during the time that Hayes was associated with Newbridge Securities Corporation, Hayes steered eight of the firm’s customers and one other investor towards investing $2,700,000.00 in five privately held entities. Supposedly, Hayes facilitated the customers’ investment purchases.
The Decision stated that investors were sold promissory notes and common stock by BTINc; promissory notes and common stock by BTInc’s successor, KIInc; promissory notes issued by IRLLC and MSLLC; and common stock of FXInc. Apparently, Hayes was compensated by the companies for accumulating a total of $130,000.00 in investor funds for the companies. Particularly, Hayes was reportedly paid $54,400.00 from an entity that was an affiliate of KIInc and IRLLC; $10,000.00 from MSLLC; and $65,882.00 from IRLLC.
The Decision revealed that Hayes had suspicious ties to the companies he selected. Indeed, FINRA stated that Hayes’ family friend was the principal of the five entities. Hayes was also apparently hired by BTInc to perform accounting services for the company. Apparently, FXInc, KIInc, IRLLC and MSLLC are no longer in business; KIInc filed bankruptcy. Customers sustained catastrophic losses.
According to the Decision, each of the thirty six investments that the nine investors collectively made in IRLLC, MSLLC, FXInc, KIInc, and BTInc constituted private securities transactions. Apparently, Hayes never apprised Newbridge Securities Corporation about his participation in those transactions. Consequently, FINRA found Hayes’ conduct violative of FINRA Rules 2010, 3280 and NASD Conduct Rule 3040.
FINRA also found that Hayes corresponded with customers utilizing unauthorized communication devices, and did not preserve his communications with those customers for the firm’s records. The Decision stated that Hayes caused Newbridge Securities Corporation to violate FINRA Rules 2010 and 4511 because of Hayes’ failure to preserve the messages or e-mails involving Hayes and customers EW, RT, SB and JB. Consequently, FINRA found Hayes’ conduct violative of FINRA Rules 2010, 4511 and NASD Rule 3110(a).
Moreover, the Decision stated that Hayes failed to hand over documents and information to FINRA when the regulator inquired into Hayes’ activities. Supposedly, on April 25, 2017, Hayes was sent a request from FINRA which required his submission of documents and information concerning the complaints Hayes received from CO and EW in regard to MSLLC, KIInc and BTInc. Evidently, the documentation and information was supposed to be provided to FINRA no later than May 12, 2017; however, Hayes did not respond. Hayes also reportedly failed to respond to a Supplemental Document Request by the December 4, 2017 deadline.
Another request was made by FINRA on December 21, 2017 for Hayes’ information and documentation about the customer complaints. Evidently, Hayes was instructed to provide the information no later than January 12, 2018. Yet, Hayes did not cooperate with those requests, claiming to FINRA instead that he had health problems preventing him from responding. Ultimately, FINRA found Hayes’ conduct violative of FINRA Rules 2010 and 8210.
FINRA Public Disclosure reveals that Hayes is referenced in seven customer initiated investment related disputes pertaining to accusations of his violative conduct during the time that he was associated with Newbridge Securities Corporation. Specifically, Hayes is referenced in a customer initiated investment related arbitration claim which was resolved for $12,500.00 in damages founded on allegations against him of the violation of North Carolina Securities Act; fraud; omissions; and misrepresentation. FINRA Arbitration No. 16-00899 (July 13, 2016).
Another customer initiated investment related arbitration claim regarding Hayes’ activities was settled for $120,000.00 in damages supported by accusations that Hayes sold the customer real estate security, penny stock and promissory notes which caused the customer losses; Hayes fraudulently omitted and misrepresented information about the unregistered securities transactions; Hayes breached his fiduciary duties to the customer; and Newbridge Securities Corporation failed to supervise the customer’s investments. FINRA Arbitration No. 16-02002 (Aug. 3, 2017).
Moreover, on April 24, 2018, a customer filed an investment related complaint regarding Hayes’ activities where the customer sought $66,246.47 in damages based upon allegations that the customer received negligent and improper advice concerning promissory notes, causing the customer to suffer catastrophic losses. Thereafter, a customer initiated investment related arbitration claim involving Hayes’ conduct was settled for $30,000.00 in damages founded on allegations that the firm failed to supervise Hayes’ activities which consisted of unsuitable private securities transactions. FINRA Arbitration No. 17-01875 (July 17, 2018). Another customer initiated investment related arbitration claim concerning Hayes’ activities was resolved for $760,000.00 in damages supported by accusations of negligence and suitability in regard to the sales of non-traded real estate investment trusts products made to the customer. FINRA Arbitration No. 17-03125 (Oct. 22, 2018).
In addition, Hayes is referenced in a customer initiated investment related arbitration claim in which the customer requested $500,000.00 in damages supported by accusations that the customer’s securities transactions were unsupervised and executed in violation of FINRA Rules; the customer’s account had been mismanaged; alternative investment transactions effected in the customer’s account were not suitable for the customer; and misrepresentations and omissions had been made concerning alternative investments. FINRA Arbitration No. 18-03996 (Nov. 20, 2018). Hayes is also subject of a customer initiated investment related arbitration claim which was resolved for $212,500.00 in damages based upon allegations that Hayes gave the customer bad advice concerning private placements, over-the-counter equities, promissory notes and stocks; and effected transactions without having authorization from the customer. FINRA Arbitration No. 17-02853 (Mar. 11, 2019).
FINRA Public Disclosure confirms that Hayes was terminated by Newbridge Securities Corporation on September 8, 2016 founded on allegations of complaints from customers alleging Hayes sold away.
