Lawrence Michael LaBine, of Scottsdale, Arizona, a stockbroker formerly registered with Newbridge Securities Corporation, has been permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to an Office of Hearing Officers Order Accepting Offer of Settlement containing findings that LaBine fraudulently misrepresented information to investors and made unsuitable investment recommendations. Department of Enforcement v. Lawrence LaBine, No. 2009019605401 (Apr. 8, 2016).
According to the Order, between April of 2009 and August of 2009, LaBine effected sales of senior debentures, Series D, which were issued through a software company, Domin-8. Apparently, misrepresentations and omissions were made by LaBine about Series D on a fraudulent basis; wherein he victimized customers CP, MD, MR, MS, JS, MSP and DSP, all of whom purchased the Series D debentures.
In particular, LaBine became apprised about Domin-8’s financial problems directly from the issuer’s investment banker and senior staff. The Order indicated that LaBine was slated to receive compensation for continuing to help drive in funds for Domin-8 after learning of the dire financial circumstances that the issuer faced. This company’s problems; however, were never communicated by LaBine to the customers when LaBine made investment recommendations, which FINRA found to be a material omission. Apparently, Domin-8 was bankrupt by 2009.
The Order further revealed that from August of 2009 to December of 2009, additional fraudulent omissions and misrepresentations were made by LaBine to MR, CP, DSP, MSP, MS and JS in reference to D8 Acquisition Corp., which was created by LaBine to acquire the assets held by Domin-8 after entering bankruptcy. Critically, FINRA found that LaBine told the customers that they would receive their money back that was invested in Domin-8’s senior debentures. FINRA found that LaBines’ fraudulent conduct was violative of Securities Act of 1934 Section 10(b), Securities and Exchange (SEC) Rule 10b-5, as well as Securities Act of 1933 Section 17(a)(1).
Moreover, FINRA found that alternative investments, including non-traded real estate investment trusts, were recommended by LaBine from 2007 to 2010 even though customers were not suitable for the products. FINRA found that six customers received recommendations to invest in the real estate investment trusts, D8 and Series D, but LaBine lacked an adequate foundation to conclude that the investments were appropriate considering their ages and investment knowledge. FINRA found that LaBine’s conduct was violative of FINRA Rule 2010, as well as NASD Rule 2110 and 2310.
Prior to FINRA’s Order, on March 2, 2016, the SEC found that LaBine engaged in willful violation of Securities Exchange Act Section 10(b) and Rule 10b-5(a) and 10b-5(c). In the Matter of Lawrence M. LaBine, No. 3-15967. LaBine was ordered to disgorge $100,00.00 and was barred by the SEC from registering with a broker-dealer or investment advisor.
FINRA Public Disclosure reveals that LaBine has been identified in twenty-three customer initiated investment related disputes containing allegations of his misconduct while employed with Newbridge Securities Corporation, DeWaay Financial Network and Associated Security Corp. In particular, on March 22, 2011, a customer filed an investment related written complaint involving LaBine’s conduct, in which the customer requested $5,000.00 in damages based upon allegations that LaBine breached his fiduciary duties to the customer and neglected to handle the customer’s investment accounts.
Subsequently, on December 6, 2010, a customer filed an investment related written complaint regarding LaBine’s activities, in which the customer requested $100,000.00 in damages based upon allegations that LaBine made unsuitable investment recommendations to the customer concerning an illiquid real estate investment trust. Then, on January 7, 2016, a customer filed an investment related arbitration claim involving LaBine’s conduct, supported by allegations of California Securities Act violations, breach of contract, breach of fiduciary duty, and unsuitability in reference to master limited partnerships and mutual fund investments held in the customer’s account.
Further, he has been named in a customer initiated investment related written complaint on April 18, 2016, in which the customer requested $41,000.00 in damages based upon allegations that LaBine effected unsuitable transactions in the customer’s account in reference to the UDF IV investment; a real estate security.
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