Arthur Lin was the branch manager of an LPL Financial office in Itasca, Illinois.
According to the US Securities and Exchange Commission, Arthur Lin, and two others, Marcin Malarz and Jacek Sienkiewicz, both of whom have apparently fled to Poland, raised at least $14,380,000 from investors through the fraudulent unregistered offer and sale of promissory notes issued by by Malarz Equity Investments, LLC, Invision Investment, LLC, Burton Grove Condominiums, LLC, Buffalo Creek Condominiums, LLC, and Willow Lake Condominiums, LLC.
According to the SEC, while Lin was associated with LPL Financial, as the branch manager, he recruited some of his clients to invest in these projects, and in some cases, convinced clients to obtain home equity loans or liquidate their brokerage investments to obtain the capital necessary to make the investments.
The Complaint Against Lin
The complaint alleges that investors were told that their funds would be used to purchase apartment complexes and rehabilitate and convert the individual apartment units for sale as condominiums, and that their investments were safe because they were guaranteed.
However, contrary to these representations, these funds were used his personal benefit and to make ponzi-type “interest” and principal payments to previous investors. Further, Lin received at least $436,000 in undisclosed commission payments, which were paid to Lin’s wife, Gloria Lin.
In April 2010, LPL Financial supposedly fired Lin for purportedly engaging in undisclosed outside business activities, and at least seven customer securities arbitration claims have already been filed against LPL Financial for Lin’s conduct and ostensibly the failure to supervise Lin.
The Firm’s Duty to Supervise
LPL Financial has an absolute duty to supervise Lin’s activities during the course of his registration or association with them as not only a licensed stockbroker but also the LPL branch manager in Itasca. Accordingly,LPL Financial may be held responsible for his conduct based upon the failure to supervise, and as a control pursuant to Section 20(a) of the Exchange Act of 1934, 15 U.S.C. § 78t.
Customers purchasing these unregistered securities from Lin, ought to have their investment accounts reviewed by a professional to determine if they have been the victim of the fraud or the sale of unregistered securities and may have the opportunity to seek recovery from LPL Financial.
Guiliano Law Group
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