Michael John Rappa of San Diego California a broker formerly employed by Foresters Equity Services Inc. has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Rappa failed to cooperate with FINRA personnel who had been investigating Rappa’s possible unauthorized private securities transactions. Letter of Acceptance Waiver and Consent No. 2018057766401 (Feb. 15, 2019).
According to the AWC, from August of 2016 to July of 2017, private securities transactions had been executed by Rappa with respect to Woodbridge Group of Companies, LLC promissory notes. Apparently, the investors, six of which were customers of the firm, purchased promissory notes in a real estate investment fund. The AWC stated that twenty-one investors had been induced by Rappa into purchasing $2,731,287.00 in notes. Apparently; however, a Chapter 11 bankruptcy petition had been filed by Woodbridge on December 4, 2017.
The AWC revealed that Rappa did not comply with his obligations to inform Foresters Equity Services Inc. about his involvement in the transactions. Rappa was reportedly obligated to give the firm written notice in which Rappa’s possible role and compensation for the private securities transaction were supposed to be laid out for the firm’s review. Consequently, the firm never authorized Rappa to engage in the Woodbridge promissory note transactions outside the firm’s auspices. FINRA found Rappa’s conduct violative of FINRA Rules 2010 and 3280.
FINRA Public Disclosure confirms that Rappa is referenced in two customer initiated investment related disputes pertaining to accusations of his violative conduct during the time that he was associated with Foresters Equity Services. Particularly, a customer filed an investment related arbitration claim concerning Rappa’s activities where the customer sought $700,000.00 in damages supported by allegations that Rappa sold away from his firm, making recommendations of real estate securities that were not suitable for the customer given the customer’s risk tolerance, financial status or investment objectives. FINRA Arbitration No. 18-00552 (Feb. 21, 2018). Apparently, the customer is also seeking punitive damages against Rappa for his investment recommendations.
Additionally, Rappa is subject of a customer initiated investment related arbitration claim in which the customer requested $75,000.00 in damages founded on accusations that Rappa made investment recommendations to the customer that were not suitable in regard to real estate securities transactions executed away from the firm. FINRA Arbitration No. 18-01103 (May 18, 2018).
Rappa’s registration with Foresters Equity Services Inc. has been terminated on July 31, 2017.
