Martin David Batstone (also known as Marty David Batstone) of San Diego California a stockbroker formerly registered with Independent Financial Group LLC has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon a FINRA Office of Hearing Officers Order Accepting Offer of Settlement containing findings that Batstone converted the funds of Independent Financial Group customers. Department of Enforcement v. Martin David Batstone, Disciplinary Proceeding No. 2019061205201 (Feb. 18, 2020).
According to the Order, between November of 2015 and August of 2016, during the time that Batstone was associated with Independent Financial Group, customers GH and EF were steered towards investing $75,000.00 in a limited liability company who purported to provide product placement services and brand management services to entertainers and athletes. GH and EF had been made aware at the time that these investments were solicited that their money would be utilized by the limited liability company to cover the distribution and marketing of an energy drink and to cover expenses pertaining to its operations.
The customers’ funds were not used as intended.
FINRA stated that from November of 2015 to January of 2017, $11,000.00 in funds provided to Batstone from GH and EF had been transferred by the stockbroker to his own account and used to cover his personal expenses. The Order revealed that as of the date in which FINRA Department of Enforcement brought a Complaint against Batstone, the customers had not received any return on their investment or the repayment of funds provided to Batstone for the limited liability company venture. FINRA indicated that the company is not in good standing as of September of 2017.
The Order revealed that investments which were made by GH and EF constituted securities as those funds were invested with expectations of receiving profits from the company’s operations. Batstone and acquaintance AB had been relied upon by the customers for their investments to be successful. Batstone failed to inform the customers that he would be using their funds for himself instead of what had been promised to those customers.
FINRA stated that Batstone engaged in fraudulent conduct violative of Securities Exchange Act of 1934 Section 10(b), Securities and Exchange Commission (SEC) Rule 10b-5(a) and FINRA Rules 2010 and 2020.
The Order stated that Batstone sold away from Independent Financial Group through his solicitation and participation in GH and EF’s investments in the limited liability company. There was no point in which Batstone notified Independent Financial Group about the company or his solicitation of the company’s investments. FINRA determined that Batstone violated Rules 2010 and 3280.
This is not the first time that Batstone has been sanctioned by FINRA for misconduct in the securities industry. He has been fined $5,000.00 and suspended from associating with any FINRA member in any capacity based upon findings of Batstone effecting unauthorized equity-index annuities sales in violation of National Association of Securities Dealers (NASD) Conduct Rule 2110. Letter of Acceptance Waiver and Consent No. 20070079810 (Mar. 2, 2010).
FINRA Public Disclosure indicates that Batstone has been identified in six customer initiated investment related disputes pertaining to allegations of his misconduct during the period in which the stockbroker was employed with securities broker dealers including Ameriprise Financial Services Inc., American Express Financial Advisors Inc. and Independent Financial Group. A customer filed an investment related complaint pertaining to Batstone’s conduct in which the customer requested $10,000.00 in damages supported by allegations that the customer’s funds were stolen when Batstone was associated with American Express Financial Advisors Inc.
Another customer filed an investment related complaint in reference to Batstone’s conduct where the customer sought $8,000.00 in damages based upon accusations that a distribution was effected from the customer’s account to fund an annuity purchase all without the customer’s permission during the period in which Batstone was associated with Ameriprise. Batstone has also been identified in a customer initiated investment related arbitration claim where the customer sought $13,000.00 in damages founded on accusations of unsuitable investment recommendations relating to real estate investments and mutual funds and Batstone failing to fulfill the customer’s brokerage transactions.
On January 25, 2017, a customer initiated investment related civil action involving Batstone’s conduct was settled for $55,000.00 in damages based upon allegations of breach of duty and failure to follow customer instructions during the time that Batstone was associated with Independent Financial Group. Civil Action No. 37-2015-00011956CUMCCTL.
On October 16, 2017, Batstone became the subject of a customer initiated investment related written complaint in which the customer requested more than $5,000.00 in damages based upon allegations of unsuitability. Batstone’s registration with Independent Financial Group was terminated on April 21, 2017.
