Keith Craig Baron of Jericho, New York, a stockbroker formerly registered with Equity Services Inc., is the subject of an enforcement action initiated by the Financial Industry Regulatory Authority (FINRA) in which the regulator is seeking sanctions against Baron based upon allegations that Baron engaged in fraud and made misrepresentations of material fact in connection with the sale of over-the-counter equities when he was associated with Equity Services Inc. Department of Enforcement v. Keith C. Baron, Complaint No. 2022073772701 (Dec. 14, 2023).
According to the Complaint, in 2016, Baron recommended an investment in Company A, a financially distressed entity, to two elderly investors, Investor A and Investor B. During this recommendation, it is alleged by FINRA that Baron made misrepresentations about Company A’s prospects and failed to disclose his own consulting agreement with Company A, which allowed him to get payments after Company A received funding. Relying on Baron’s recommendations, Investors A and B reportedly invested over $350,000.00 in Company A.
The Complaint states that in 2018 and 2019, Baron also misled Investors A and B by stating that Company A intended to buy back their shares.
Baron made omissions and misrepresentations in violation of FINRA Rule 2010, according to the regulator.
Additionally, the Complaint alleged that between 2015 and 2017, Baron did not notify Equity Services Inc., about his consulting role with Company A, for which he was receiving a $10,000.00 monthly fee. Instead, Baron reportedly falsely declared in his annual certifications to the securities broker dealer that he had no outside business activities that were not disclosed. Therefore, he allegedly violated FINRA Rules 2010 and 3270.
In 2016, Baron also allegedly failed to provide prior written notice to Equity Services Inc. about his participation in private securities transactions related to Investors A and B’s purchases of Company A stock, a violation of FINRA Rules 2010 and 3280.
The Complaint additionally states that in 2019, following a complaint by Investors A and B to FINRA about Baron, he misrepresented to Equity Services information about his involvement in the investors’ purchases of Company A’s stock, violating FINRA Rule 2010.
Lastly, the Complaint alleged that Baron provided false information to FINRA in two separate written responses during an investigation. He allegedly misrepresented his involvement with Investors A and B’s investment in Company A and his relationship with Company A. Therefore, Baron is accused of violating FINRA Rules 2010 and 8210.
FINRA Public Disclosure shows that Baron was referenced in six customer initiated investment related disputes concerning his conduct while associated with securities broker dealers. On January 31, 2012, a customer initiated investment related civil action involving Baron’s conduct was settled to resolve allegations that the plaintiffs invested in Native American Energy Group but never received any stock certificates for their investments. Civil Action No. 005503-2010. The plaintiffs asserted that they had been victims of an investment scheme and were uncertain about the actual securities they owned.
On June 24, 2014, a customer initiated investment related complaint involving Baron was settled for $68,124.24 in damages. The complaint alleged that while associated with NYLife Securities, Baron did not explain the customer’s options and prompted the purchase of a traditional whole life insurance within a 401K plan. Allegedly, the customer believed that their funds would be invested in a periodic investment plan, but their funds were instead placed in a money market fund. The complaint also alleged that the customer only became apprised of penalties and surrender charges after their universal life insurance policy was purchased.
In a customer initiated investment related complaint filed on July 22, 2019, a customer requested $425,000.00 in damages based upon allegations that while associated with Equity Services Inc., Baron engaged in fraud to transfer assets from life insurance and annuity products into an investment allegedly sponsored by Prudential. This complaint was denied.
Also, on July 27, 2023, a customer initiated investment related FINRA securities arbitration claim involving Baron’s conduct was settled for $175,000.00. The claim alleged that Baron was a securities broker for NAEG during which time he solicited oil and gas investments from the customer with the purpose of misappropriating their funds. FINRA Arbitration No. 22-02591.
Baron was associated with Equity Services Inc. in Jericho, New York from August 13, 2015, to January 7, 2022.