Larry Michael Phillips of Woodland Hills California a stockbroker formerly employed by Purshe Kaplan Sterling Investments and former owner of TPG Advisors (The Phillips Group Advisors) has been barred by Securities and Exchange Commission (SEC) from associating with any broker or investment advisor as well as any brokerage firm and investment advisory according to a Cease and Desist Order containing findings that Phillips engaged in a fraudulent investment scheme. Case No. 3-17217 (Dec. 15, 2016).
According to the Order, during the time that Phillips was associated with Purshe Kaplan Sterling Investments, he owned and managed an investment advisory, TPG Advisors. Apparently, Phillips engaged in a cherry-picking scheme through the investment advisory. Evidently, profitable trades had been impermissibly allocated by Phillips to certain accounts. Consequently, SEC found Phillips’ conduct violative of Securities and Exchange Act of 1934 Section 10(b) and SEC Rule 10b-5. Moreover, SEC found that Phillips caused the TPG Advisors’ violations of Investment Advisers Act Sections 206(1) and 206(2).
This is not the first time that Phillips has been subject of a regulatory action for engaging in wrongful activities in the securities industry. In particular, Phillips has been fined $7,500.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he overcharged customers on investment transactions. Letter of Acceptance Waiver and Consent No. 2011027842701 (Apr. 27, 2015).
According to the AWC, while Phillips was associated with Purshe Kaplan Sterling Investments, Phillips bought municipal securities, principal protected notes, floating rate notes, steepener certificates of deposits, and steepener notes for clients of the investment advisory. Apparently, mark-ups had been applied to those transactions before they had been allocated to customers’ advisory accounts. Critically, Phillips charged customers an advisory fee on those same investments which had already contained a mark-up. FINRA found that Phillips’ conduct was violative of Municipal Securities Rulemaking Board (MSRB) Rule G-17 and FINRA Rules 2010.
Moreover, Phillips has been suspended by National Association of Securities Dealers (NASD) based upon allegations that Phillips disseminated misleading investment information to customers. Letter of Acceptance Waiver and Consent No. CE2050007 (Apr. 13, 2005). Apparently, on twenty-six occasions, Phillips neglected to indicate within his communications certain important facts about investment strategies and products, or made misleading, unwarranted or exaggerated statements to customers. NASD found Phillips’ conduct violative of NASD Conduct Rules 2210(D)(1)(A), 2210(D)(1)(B) and IM-2210-2.
FINRA Public Disclosure reveals that Phillips has been identified in two customer initiated investment related disputes pertaining to accusations of his violative conduct while employed with Dean Witter and Wachovia Securities. For example, on December 3, 2009, a customer initiated investment related complaint regarding Phillips’ conduct was resolved for $25,000.00 in damages founded on allegations that features and benefits of a variable annuity guaranteed minimum income benefit had been misrepresented.
