Richard Lyndon Brown of Farmingdale New York a stockbroker formerly registered with Arive Capital Markets and Chelsea Financial Services has been suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon allegations that Brown neglected to cooperate with a FINRA Arbitration Award where he was ordered to pay a customer $70,570.21 in compensatory damages given findings of fraud. Case No. 19-02719 (Mar. 27, 2020).
According to the claim, the customer had been unsuitably placed into speculative penny stock investments. Brown’s negligence resulted in the customer’s losses. The customer’s claim also alleges violations of Washington State Securities Act and Securities and Exchange Commission (SEC) Rule 10b-5.
Brown has been identified in six more customer initiated investment related disputes containing accusations of his misconduct while employed by securities broker dealers including Brookstreet Securities, Chelsea Financial Services and Arive Capital Markets. FINRA Public Disclosure reveals that a customer initiated investment related complaint involving Brown’s conduct was settled for $15,594.62 in damages founded on allegations of misrepresentation of over-the-counter equities sold to the Brookstreet customer.
Another customer initiated investment related arbitration claim involving Brown’s conduct was resolved for $125,000.00 in damages supported by accusations that investment recommendations made to the customer were not suitable and that trades were executed in the customer’s account on an excessive basis during the time that Brown was associated with Chelsea Financial Services.
Brown has been referenced in another customer initiated investment related arbitration claim in which the customer was awarded $72,132.95 in compensatory damages based upon the stockbroker being found liable on the customer’s claims including breach of contractual and fiduciary obligations that were owed to the customer concerning securities transactions. FINRA Arbitration No. 15-02488 (Dec. 7, 2016). The claim alleges unsuitability and churning by the stockbroker. Another customer initiated investment related arbitration claim involving Brown’s conduct was settled for $7,000.00 in damages founded on allegations that the customer sustained losses on unsuitable investments sold by Brown at Chelsea Financial and Arive Capital Markets. FINRA Arbitration No. 18-03499 (Sept. 17, 2019).
Brown has also been charged by Securities And Exchange Commission (SEC) with defrauding investors in a scheme where he and investor-relations professionals Jeffrey Auerbach and Jared Mitchell and stockbroker Gino Pereira engaged in a stockbroker bribery scheme. SEC v. Richard Brown et al. Civil Action No. 1:19-cv-05631 (Oct. 4, 2019). According to the Complaint, Brown was paid cash bribes in return for advising customers to obtain Nxt-ID (NXTD) stock valued at $750,000.00. The stockbroker allegedly failed to tell investors that he was bribed. Brown’s conduct is allegedly violative of Securities Exchange Act of 1934 Section 10(b) and SEC Rule 10b-5.
Brown has also pleaded guilty to one count of securities fraud. Criminal Action No. 16-CR-00234 (E.D.N.Y. Dec. 6, 2017). Brown was allegedly involved in a criminal scheme between 2009 and 2015 where he received kickbacks to invest his customers in stock by ForceField. The scheme caused investors to experience losses of approximately $131,000,000.00.
Brown’s registration with Arive Capital Markets was terminated on May 6, 2016.