Our law firm is investigating Financial Network Investment Corporation (“FNIC”) n/k/a Cetera Advisor Networks, LLC in connection with the supervision of former FNIC Advisor Joseph T. Pappalardo (CRD No. 2088747) (“Pappalardo”). On September 26, 2014, Pappalardo entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) with the Financial Industry Regulatory Authority (“FINRA”) wherein he consented to be barred in all capacities from associating with any FINRA member firm.
According to the AWC, “Upon joining FNIC in 2008 (which had acquired Pappalardo’s previous member firm), Pappalardo was required to complete a ‘Pre-Registration Questionnaire.’ He was also required to complete an ‘Outside Business Activity Disclosure’ form in 2010. In 2008, Pappalardo disclosed on the Pre-Registration Questionnaire that he had previously been involved in a real estate company he formed in 2003 called Coast-2-Coast Properties (‘C2C’) to buy, renovate, and sell houses but that the company was no longer in business. This was false. In fact, during the relevant time period, Pappalardo was involved in several outside business activities that he failed to disclose to his member firm, including his ongoing involvement in C2C and C2C’s ‘marketing arm’ called ‘Prosperity Financial Estate Planning and Insurance Services’ (‘Prosperity Financial’). Without seeking permission from his member firm, Pappalardo solicited firm customers to invest in these business ventures.” FINRA further alleges that Pappalardo made false and misleading statements, and converted funds for his personal use. Finally, FINRA states that “Pappalardo repeatedly failed to provide notice of five other outside business activities, including United First Financial, Euergeteo Ministries, Plethuna Investments, Triumphant Ministries, and CLA-USA.” Selling investments to customers which are not approved for sale by the broker-dealer is known as “selling away.”
According to FINRA’s BrokerCheck, during the time period of August 2008 to September 2012, Pappalardo was registered with FNIC. FNIC is now known as Cetera Advisor Networks, LLC. Under FINRA Rules, FNIC was obligated to properly supervise the activities of Pappalardo during the time he was registered with the firm. Accordingly, FNIC n/k/a Cetera may be liable for failing to supervise Pappalardo’s activities while registered at the firm, and could potentially be responsible for compensating customers of Pappalardo for any potential losses.
If you invested with Pappalardo, please contact our law firm to explore your legal options, toll-free, at 888-997-9956.