Francis Joseph Velten (also known as Frank Velten) of New Port Richey, Florida, a stockbroker formerly registered with Summit Brokerage Services Inc., has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement with failing to cooperate in a FINRA investigation into accusations of Velten’s churning of customer accounts when he was employed by Summit Brokerage Services. Department of Enforcement v. Francis Joseph Velten, Disciplinary Proceeding No. 2020066032801 (March 31, 2022).
According to the Complaint, Velten was investigated by Department of Enforcement when the regulator received information about Velten possibly flipping and churning accounts of elderly Summit Brokerage Services customers. The Complaint states that Velten potentially had customers sell mutual funds and annuities held away from Summit and use the proceeds for new bonus annuity purchases. The customers allegedly took Velten’s advice and sustained surrender charges in selling their annuities. Velten potentially took in commissions on sales of new annuities to customers.
On October 25, 2021, FINRA tried to learn more from Velten about his interactions with customers by having him submit a written statement responding to the allegations. Velten did not respond to the regulator’s request, according to the Complaint. Velten allegedly failed to respond to FINRA’s second request relating to the investigation. Two more requests were made for Velten’s information to no avail. FINRA contends that Velten impeded its ability to determine if he engaged in excessive trading and churning of customer accounts. He allegedly violated FINRA Rules 2010 and 8210 for failure to comply with FINRA’s investigation.
FINRA Public Disclosure shows that Velten has been identified in nine customer initiated investment related disputes concerning accusations of his activities while employed by securities broker dealers, including Summit Brokerage Services. Velten is identified in a customer initiated investment related FINRA securities arbitration claim which was resolved for $65,000.00 in damages founded on allegations of bad annuity exchanges, as the customers experienced losses of guaranteed income and death benefits.
Another customer filed an investment related complaint concerning Velten’s activities where the customer requested $5,000.00 in damages supported by accusations of Velten having used tax-qualified funds in a non-qualified annuity.
On February 4, 2016, another customer initiated investment related FINRA securities arbitration claim regarding Velten’s conduct was settled for $10,000.00 in damages based upon allegations that Velten had the customer invest in an unsuitable variable annuity while Velten was associated with Summit Brokerage Services. FINRA Arbitration No. 15-00560.
Velten is also the subject of a customer initiated investment related written complaint which was resolved for $14,900.00 on February 15, 2017, founded on accusations that Velten provided unsuitable recommendations to the customer as it pertained to Sabrient Systems Inc. Forward Looking Value Portfolio Series 3.
Velten was registered with Summit Brokerage Services between August 18, 2006, and August 7, 2018. He was registered with Independent Financial Group LLC between July 27, 2018, and January 27, 2020, and registered with Ameriprise Financial Services LLC between January 27, 2020, and April 28, 2020.
