Financial Advisor, Floyd Powell, Has Four Complaints Alleging The Sale Of A Fraudulent SecurityThe Wolper Law Firm, P.A. is currently investigating claims against Floyd Powell, a former Financial Adviser at MML Investment Services in Albertville, Alabama. Floyd Powell has been in the securities industry since the 1990s and was previously employed by MSI Financial Services. According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), between May 2018 and October 2018, Floyd Powell was the subject of four customer complaints, alleging some variation of the following: “Claimants allege that the rep recommended that they invest in unregistered and fraudulent investment programs, made false representations and failed to disclose material facts about the investments.” The total damages alleged in these four complaints is nearly $4 million and the matter remain pending. The sale of unregistered securities is a growing trend in the securities industry. Brokers are selling more esoteric securities outside the normal course and scope of their duties as Financial Advisors and customers unknowingly agree to purchase these investments due to the trust they have for their Financial Advisors. For a full copy of Floyd Powell’s BrokerCheck disclosures, click https://brokercheck.finra.org/individual/summary/2220029#disclosuresSection Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses. The Wolper Law Firm, P.A. is interested in speaking with clients of Floyd Powell as part of its investigation. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org. The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.
Former MSI Financial and MML Investors Services Broker Floyd Powell Barred by FINRA for Allegedly Selling $3.49 Million of Unregistered Woodbridge Promissory Notes
Floyd Powell is a former Financial Advisor at MSI Financial Services from 1992 to 2017, then MML Investors Services from 2017 to 2018, both in Albertville, AL.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on February 13, 2019, FINRA sanctioned Floyd Powell by barring him from the industry in any capacity for engaging in “undisclosed and unapproved private securities transactions totaling approximately $3.49 million” of Woodbridge Group promissory notes. Separately, Floyd Powell has four pending customer disputes alleging the sale of unregistered securities.
For a copy of the FINRA sanction, click http://www.finra.org/sites/default/files/fda_documents/2018058504901%20Floyd%20E.%20Powell%20CRD%202220029%20AWC%20jm.pdf
Unapproved private securities transactions are referred to in the industry as “selling away.” FINRA strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
For years, the Woodbridge Group of Companies operated a ponzi scheme in which it sold (through outside financial professionals) promissory notes allegedly backed by mortgages. The investment program turned out to be a $1.2 billion ponzi scheme and Woodbridge’s principal, Robert Shapiro, is currently under criminal indictment.
According to the SEC’s complaint filed against Woodbridge, the Woodbridge business model was to borrow money from investors in exchange for promissory notes, maturing usually in 12 or 18 months. The notes had an annual interest rate of 5% to 8% payable monthly. The investors’ money was supposed to be issued to lenders in the form of securitized mortgages, but rarely was, according to the SEC. .
In December 2016, Woodbridge declared bankruptcy.
For a copy of the Floyd Powel CRD, click https://brokercheck.finra.org/individual/summary/2220029
The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at email@example.com.