Giovanni L. Acevedo, a registered representative with ING, has been charged by the Financial Industry Regulatory Authority (FINRA) in a Complaint alleging that Acevedo stole in excess of $160,000 in customer funds from three clients of the firm for Acevedo’s personal use, while also falsifying information to FINRA regulators during an investigation into Acevedo’s conversion of funds. Department of Enforcement v. Giovanni L. Acevedo, No. 2014041529001 (Apr. 8, 2015).
According to the Complaint, Acevedo’s first victim, ACH, held a securities broker account at Voya (formerly ING). Acevedo was ACH’s financial advisor and recommended that ACH make certain financial investments. The Complaint indicated that ACH provided Acevedo with $68,000 in funds for ACI Capital Investment, where Acevedo informed ACH that the money would be invested based on ACH’s instructions.
Acevedo, according to the Complaint, deposited $68,000 in funds with Acevedo, where he cashed her check in the name of ACE Capital Investments, LLC (Acevedo’s company). Acevedo was alleged to have sent ACH a fake accounting statement that falsely reflected an investment in Non-Qual/ACI Tax-free, a fake fund earning seven percent semi-annually for a thirty-six month term. The Complaint indicated that ACH never received her investment in accordance with the maturity date on her false account statement, or any other information for that matter. Further, from June, 2010 – March, 2013, Acevedo reportedly recommended that ACH make other investments in institutions which were unidentified.
The Complaint stated that ACH provided Acevedo twenty-one additional checks while leaving the dollar amount and payee of the check blank based on Acevedo’s representations that the payee needed to be left blank because of not knowing the specific names of the investments or amounts to be invested.
In another case according to the Complaint, Acevedo converted funds from client ECG. From February, 2012 through August, 2013, Acevedo allegedly convinced ECG to invest based on the theory that the client was investing in certain products which were only available to Voya’s staff. The Complaint indicated that Acevedo would then advise ECH to make checks payable to his Ace Advisory Group or even himself, where he would then invest such funds based on ECG’s instruction. ECG was reportedly taken for $12,000 by Acevedo over the course of five checks.
Finally, from January, 1, 2014 – April 30, 2014, a third firm customer, KR, had a Voya securities brokerage account where Acevedo was the financial advisor. The Complaint noted that in March 13, 2014, Acevedo had recommended KR to invest $5,000 in a security underwritten by his firm. After convincing KR to part ways with the money in her personal checking account and with leaving the payee line blank (based on the similar approach with ACH), Acevedo ultimately cashed her check and used the funds for his own benefit.
It is no surprise that FINRA Rule 2150 and NASD Rule 2330 prohibit a person that associates with a FINRA member from making improper use of a customer’s securities or funds. FINRA has stated that a registered representative who converts a customers funds violates not only FINRA Rule 2150, but also NASSD Rule 2330. Further, any violation of FINRA Rule 2150 and NASD rule 2330 is a violation of Rule 2010, requiring a member, in the course of conducting their business, to observe high standards of commercial honor and just and equitable principles of trade.
The Complaint also charged Acevedo with providing false information to FINRA investigators. According to the Complaint, FINRA, since 2014, was investigating Acevedo’s potential conversion of client funds among other violations. The Complaint indicated that Acevedo, in the course of providing the requested information and documentation to FINRA concerning the aforementioned clients, lied extensively about the nature of the money he received as well as whether he ever endorsed blank checks. FINRA is seeking that he be found to have violated Rule 8210 and 2010 by providing false information.
Public disclosure records reveal that Acevedo has been subject to five disclosure events. On September 26, 2011, he was charged with a felonies for trafficking and possession of methamphetamine. On May 28, 2014, Acevedo settled a claim with a customer for $220,000 after a customer alleged that Acevedo had wrongfully manipulated her and her accounts, provided her with negligent investment advice and/or converted her investment funds to his own use and benefit (ING Financial partners terminated Acevedo based on such allegations on August 12, 2014). On September 17, 2014, Acevedo settled a claim with a customer for $5,000 after a customer sought return of her investment she alleged Acevedo fraudulently procured from her.
Firms and individuals, not surprisingly, are prohibited from unauthorized use of customer funds, borrowing of a customer’s securities or funds, forgery, non-disclosures or misstatements of material facts, and various deceptions and manipulations. Such conduct can also be found to violate criminal and other civil laws, and be subject to sanction from the federal and state government bodies.
Securities brokerage firms have a duty to supervise their brokers and the sales practices of their brokers, and to review customer statements for, among other things, evidence of suitability, unauthorized trading, or excessive activity.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
