Aaron Heimowitz, a Stockbroker with Newport Coast Securities, was suspended from association with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity for a period of seven months and fined $15,000 after consenting to findings that Heimowitz participated in private securities transactions and outside business activities in violation of firm policies. Letter of Acceptance, Waiver, and Consent, No. 20140429989 (Oct. 15, 2015).
According to the AWC, from August, 2008 – August, 2011, at a time when Heimowitz was registered with Newport, he had recommended that four customers purchase securities in three companies that did not offer securities through Newport. These companies, according to the AWC, included a gold mining company, where Heimowitz’s son served as the CEO. The AWC indicated that a customer invested $26,000 in the company as a result.
The AWC further noted that Heimowitz recommended that the customers invest in two other companies specialized in the production of renewable energy, where Heimowitz was the consultant for the companies. In turn, the customers invested a total of $255,000.00. Heimowitz reportedly failed to inform Newport via written or other notice of his participation in the customers’ purchase of the securities. Consequently, FINRA found Heimowitz’s conduct to be in violation of NASD Conduct Rule 3040, Rule 2110, and FINRA Rule 2010.
Further, according to the AWC, Heimowitz had purchased gold and silver coins from the U.S. Treasury, subsequently selling them to customers. In this case, Heimowitz also failed to provide any notice to Newport of these transactions. FINRA found this conduct to be in violation of NASD Conduct Rule 3030, Rule 3270, 2110, and FINRA Rule 2010.
Selling away, also known as private securities transactions or undisclosed outside business activities, occurs when a stockbroker engages or participates in the sale of securities to investors outside of the formal approval of the securities firm with whom they are associated.
As a general matter, stockbrokers are only permitted to engage in the solicitation or sale of investments and investment related products approved by their firm. However, quite frequently, stockbrokers solicit, participate, or directly engage in the sale of typically unregistered securities or investments without the approval and outside of the auspices of their firm. These investments may take on many forms, and may include the recommendation of an outside money manager, or a hedge fund, which may sometimes turn out to be a Ponzi scheme. Sometimes these outside investments may include off-shore securities, insurance trusts, stocks or ownership interests in small businesses, startup ventures, corporate debentures, mortgage notes, private placements, promissory notes, oil & gas interests, real estate partnerships, pre-IPO shares, and a variety of other investments.
Public disclosure records via FINRA’s BrokerCheck reveal that Heimowitz has been subject to seven disclosure incidents. On June 1, 1973, Heimowitz settled a customer dispute for $10,000 after a customer complained about a private placement Heimowitz arranged. On March 19, 1990, a party received an award of $71,000 against Heimowitz after claims of unsuitability of investment and misrepresentation. On November 1, 1990, Heimowitz settled a customer dispute for $50,000.00 after a customer claimed unsuitability and misrepresentation in the handling of her securities account.
On July 13, 1993, Heimowitz settled a customer dispute after a customer alleged misrepresentation regarding North American U.S. Government Securities Fund sales charges. On February 26, 2009, Heimowitz settled a customer dispute for $24,000.00 after a customer alleged misrepresentation. On November 19, 2013, Heimowitz settled a customer dispute for $403,162.00 after a customer alleged breach of fiduciary duty, misrepresentation and material omissions of fact, negligence, violation of securities laws, and breach of contract.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
