Raymond Dickie Adcock of Cabot Arizona a stockbroker formerly registered with Regal Securities Inc. has been barred in all capacities by the Arkansas Securities Commissioner supported by consenting to findings that he executed unauthorized liquidations and facilitated customers’ purchases that were not registered by Regal Securities. In the Matter of Raymond Dickie Adcock Case No. S-14-008 (Sept. 16, 2016).
According to the Order, between February 23, 2011 and February 15, 2012, during the time that Adcock was a supervisor with Regal Securities, Inc. and investment advisor with Regal Advisory Services, he and one of Regal’s stockbrokers, Charles Bailey Ferrill, Jr., created Talon LLC and Talon Capital, LP. Evidently, Talon LLC was the general partner of Talon LP, and Ferrill and Adcock were the only management personnel and directors of Talon LLC. Apparently, those companies were never registered with the Arizona Securities Department nor exempt from registration in regard to the securities transactions it conducted.
The Order stated that between March 14, 2011 and October 3, 2012, twenty-six Talon LLC units were solicited and sold by Talon LLC via unsecured convertible promissory notes, with each full unit having been sold for $17,500.00 and a partial unit sold for $10,000.00. In sum, Talon LLC accumulated $465,000.00 from investors through the unsecured convertible promissory notes offering. The Order indicated that investors expected to receive twelve percent annual returns on their investments, paid quarterly.
The Order revealed that a private placement memorandum had been prepared by Adcock for the Talon LLC promissory notes offering, where investors were informed that Talon LLC’s intent was to accumulate funds from investors for a hedge fund that Talon LP would start. Apparently, Adcock informed investors that a Regal Securities Inc. brokerage account would be opened in which Adcock would be responsible for effecting a strategy involving the trading of exchange traded fund and covered call options.
The Arkansas Securities Commissioner concluded that Adcock’s trading strategy was not suitable for Talon LLC because he had been effecting trades within Talon LLC’s account in order to liquidate funds and pay investors interest despite his knowledge that (1) Talon LLC’s accounts were not able to accumulate necessary profits to make interest payments and (2) liquidations caused undue fees and commissions to be incurred by Talon LLC. Consequently, Arkansas Securities Commissioner found Adcock’s conduct violative of Rule 308.01(d) of the Rules of the Arkansas Securities Commissioner.
Further, Arkansas Securities Commissioner found that Adcock executed the liquidation of funds and enabled purchases of the Talon LLC promissory notes to be made by customers of Regal Advisory Services despite those securities not having been authorized by Regal Securities Inc. or Regal Advisory Services; conduct violative of Rule 308.02(a) of the Rules of the Arkansas Securities Commissioner.
Moreover, the Order stated that Adcock cashed checks from Talon LLC’s checking account even though Regal Advisory Services had not approved of those payments to be made. The Commissioner concluded that Adcock’s conduct in that regard was violative of Rules 308.01(y) and 308.02(y) of the Rules of the Arkansas Securities Commissioner.
This is not Adcock’s first regulatory infraction. Particularly, he has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he misappropriated funds that had been accumulated by an unregistered investment advisor for a private placement. Letter of Acceptance Waiver and Consent No. 2015044253401 (June 10, 2015).
Moreover, FINRA Public Disclosure reveals that Adcock has been identified in three customer initiated investment related disputes that pertain to allegations of his wrongdoing during the time that he was registered with Regions Investment Company, Inc., Morgan Keegan & Company, Inc. and Regal Securities, Inc. Particularly, on February 5, 2001, a customer initiated investment related complaint involving Adcock’s activities was resolved for $6,480.00 in damages founded on accusations that Adcock failed to fully explain the terms and conditions of a certificate of deposit investment made by the customer.
Thereafter, a customer initiated investment related arbitration claim concerning Adcock’s conduct was settled for $75,500.00 in damages supported by allegations that transactions were effected in the customer’s account that were not suitable for the customer and misrepresentations had been made to the customer concerning mutual fund transactions. National Association of Securities Dealers (NASD) Arbitration No. 04-06113 (Oct. 4, 2005). Subsequently, a customer initiated investment related arbitration claim regarding Adcock’s activities was resolved for $15,000.00 in damages based upon accusations that unauthorized private placement securities had been sold to the customer. FINRA Arbitration No. 16-03016 (Dec. 27, 2016).
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