Richard Grant Cody, of Spring Lake, New Jersey, a stockbroker formerly registered with Westminster Financial Securities, Inc., has been named in a customer initiated investment related written complaint on January 18, 2017, based upon allegations that Cody misappropriated funds belonging to the customer in connection with over-the-counter equity transactions.
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that Cody has been identified in ten additional customer initiated investment related disputes containing allegations of his misconduct while employed with Westminster Financial Securities, Inc., Concorde Investments Services, LLC, GunAllen Financial Inc., Leerink Swan & Company, Inc., Salomon Smith Barney, Inc., and Merrill Lynch, Pierce, Fenner & Smith, Inc.
Specifically, on September 7, 2007, two customer initiated investment related complaints involving Cody’s conduct were settled for a total of $76,000.00 in damages based upon allegations that Cody effected unsuitable collateralized mortgage obligation transactions in the customers’ accounts. On August 25, 2006, a customer initiated investment related arbitration claim regarding Cody’s activities was resolved for $100,000.00 in damages based upon allegations that Cody effected over-the-counter equity transactions which were neither authorized nor suitable.
Subsequently, on October 23, 2015, a customer filed an investment related arbitration claim involving Cody’s conduct, in which the customer requested $160,000.00 in damages based upon allegations that Cody effected an unauthorized withdrawal transaction in the customer’s policy, which caused the customer to violate an insurance rider’s terms.
On November 28, 2016, another customer filed an investment related arbitration claim involving Cody’s conduct, in which the customer requested $545,000.00 in damages based upon allegations that Cody effected wire transfers in the customer’s account that had not been authorized. Further, from November 28, 2016, to December 22, 2016, five additional customer initiated investment related complaints had been filed regarding Cody’s conduct, in which the customers’ claims were based on allegations including forgery and misappropriation.
Moreover, Cody was charged by the Securities and Exchange Commission (SEC) in a Complaint alleging that Cody, in the capacity as broker representative and investment advisor, defrauded investors. SEC Litigation Release 23702 (Dec. 13, 2016). According to the Complaint, three customers had been defrauded by Cody, where Cody was alleged to have concealed customers’ investment losses via misrepresentations, and concealed that the payments made to customers had actually led customers’ savings to be depleted.
The Complaint also alleged that customers had been instructed by Cody that the funds which were used to pay the customers had come from investment gains, when no gains existed; but rather, the customers’ investment accounts had been largely depleted. Critically, two customers’ accounts had been reportedly depleted by 2014. Cody apparently concealed this information from customers by sending customers monies from outside accounts, lying to customers about their monies having been invested in annuities, and distributing fake tax forms. The SEC ultimately alleged that Cody’s conduct was violative of Securities and Exchange Act of 1934 Section 10(b), Rule 10b-5, as well as Investment Advisors Act of 1940 Sections 206.
Cody’s registration with Westminster Financial Services, Inc. was terminated on March 1, 2013. From August 18, 2016, to September 12, 2016, Cody was registered with IFS Securities.
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