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The Securities Arbitration Law Firm of KlaymanToskes (www.klaymantoskes.com) announced today that it is investigating SII Investments relating to the supervision of former SII broker David Patrick Thomas (“Thomas”) who allegedly engaged in “selling away” investments in Chadbourn Partners, LLC, a Florida limited liability company that was formed on April 15, 2010. Selling away involves a situation where a broker sells investments to his customers that have not been approved by his broker-dealer.
Earlier this year, a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, to Deny Future Registrations, to Impose a Fine, and to Charge Costs (“Statement of Charges”) was filed by the State of Washington Department of Financial Institutions, Securities Division in connection with Thomas’ alleged sales of investments in Chadbourn Partners. According to the Statement of Charges, “from at least March 2010 through October 2010, Thomas offered and sold [Chadbourn] LLC membership interests totaling $235,000 to at least four Washington investors.” Further, “during 2010 Thomas offered and sold [Chadbourn] debentures totaling more than $200,000 to at least four Washington investors.” Neither the LLC membership interests nor the debentures were recorded on the books and records of SII.
From September 2007 to December 2010, Thomas was registered with FINRA broker-dealer SII Investments. Under FINRA Rules, SII was obligated to properly supervise the activities of Thomas during the time he was registered with the brokerage firm. Accordingly, SII may be liable for failing to supervise Thomas’ activities while registered at the firm.
If you have information relating to this investigation, please contact Steven D. Toskes, Esquire or Jahan K. Manasseh, Esquire of KlaymanToskes, at 888-997-9956.