The Securities Arbitration Law Firm of KlaymanToskes announced today that it is investigating potential claims relating to the conduct of former Multi-Financial Securities Corp. and Dempsey Lord Smith advisor William David Thomas, Jr. (“Thomas”) (CRD No. 1316283). Thomas was also involved with Grandview Wealth Management and Twin Oaks Strategic Partners.
In August of 2012, Thomas entered into a Letter of Acceptance, Waiver and Consent (“AWC”) with the Financial Industry Regulatory Authority (“FINRA”) concerning his involvement with borrowing money from his customers and for engaging in outside business activity. According to the AWC, “between March 2, 2009 and June 29, 2009, Thomas…borrowed a total of approximately $245,000 from customers [of Multi-Financial]…in four separate instances. The Firm’s procedures prohibit a representative from borrowing money from a customer, except in the case of immediate family members or if such customers were in the business of lending money. None of the customers were immediate family members or in the business of lending money. Thomas was aware of the Firm’s prohibitions at the time of the loans. Thomas did not inform the Firm of the loans until approximately eleven months after the initial loan. Once Thomas verbally informed the Firm of the loans, the Firm’s CEO instructed Thomas to prepare promissory notes for each loan and apply a specific repayment schedule. Each customer executed the post-loan promissory notes, which referenced a 10% interest rate for repayment. To date, however, Thomas has failed to repay any portion of the loaned funds. As a result of such conduct, Thomas violated NASD Conduct Rule 2370 and FINRA Rule 2010.”
The AWC added, “Between 2009 and 2010, Thomas…participated in private securities transactions by offering and selling securities to raise funds for the purchase of Integrity Capital, Inc. (“Integrity”), a company involved in the receivables factoring business. Overall, seven client investors made a total of eight separate investments in Integrity. At no point did Thomas disclose to the Firm that he participated in the sale of investments in Integrity, nor did he receive approval from the Firm for these sales. As a result of such conduct, Thomas violated NASD Conduct Rule 3040 and FINRA Rule 2010.”
According to FINRA’s BrokerCheck, from April 1992 to March 2010, Thomas was registered with Multi-Financial Securities Corp. Thereafter, from May 2010 to November 2011, Thomas was registered with Dempsey Lord Smith. Under FINRA Rules, these firms were obligated to properly supervise the activities of Thomas during the time he was registered with these brokerage firms. Accordingly, Multi-Financial Securities Corp. and/or Dempsey Lord Smith may be liable for failing to supervise Thomas’ activities while registered at the firms, and could potentially be responsible for compensating customers of Thomas for their losses.
Customers of Thomas who sustained losses are encouraged to contact KlaymanToskes to explore their legal rights and options. KlaymanToskes can be reached, toll free, at 888-997-9956.