How Investors Can Sue Former IBN Financial Services, Inc. Broker Anthony Diaz for Over Concentration of Investments
Posted on Monday, August 13th, 2018 at 2:32 pm
Former IBN Financial Services, Inc. financial advisor Anthony Diaz (CRD# 4131948) is alleged to engage in unauthorized trades and over concentrate customer accounts. Diaz was registered with IBN Financial Services, Inc. in Scotrun, Pennsylvania from 2012 to 2015.
Previously, he was registered with Sandlapper Securities, LLC in Scotrun, Pennsylvania from March to September 2012, when he was terminated regarding, “During an internal investigation it was discovered that the registered representative was soliciting sales of annuities to clients and was not appointed with the annuity companies to sell the annuities. The representative was having clients complete the annuity contracts and giving the paperwork to the principal in his office to sign as the selling agent.”
In January 2020, Diaz was convicted on 11 counts of wire fraud and mail fraud for falsifying clients’ net worth to put them into high-risk investments, according to public records. Each of the 11 counts faces a maximum of 20 years in prison.
According to an article in Investment News, “Diaz then provided false information on these documents concerning his clients’ net worth, income, risk tolerance and/or investment experience in order to make it appear that these clients met the net worth and/or income requirements to invest in these products.”
Previously, he was also registered with the following investment firms:
- International Financial Solutions, Inc. in Scotrun, Pennsylvania (08/29/2011 – 03/08/2012)
- Kovack Securities Inc. in Scotrun, Pennsylvania (04/05/2011 – 08/18/2011)
- Matrix Capital Group, Inc. in New York, New York (03/09/2010 – 04/06/2011)
- Sii Investments, Inc. in Scotrun, Pennsylvania (03/31/2009 – 03/03/2010)
Diaz was terminated from Kovack Securities, Inc. regarding, “Firm received written and verbal complaints alleging that Mr. Diaz entered unauthorized trades in their accounts.”
Diaz was terminated from Sii Investments, Inc. regarding, “Violated the firm’s prohibition against unauthorized trading.”
Diaz was employed by Edward Jones in St. Louis, Missouri from 2000 to 2002 when he was terminated regarding, “Provide inaccurate information to field supervisor.”
According to public records, a former customer of IBN Financial Services, Inc. filed a $500,000 FINRA arbitration claim against IBN Financial Services, Inc. and Diaz, alleging that Diaz over concentrated the client’s retirement savings in high-risk real estate investment trusts (REITs), and illiquid alternative investments, including Bakken Drilling Fund III, Ameritech College Holdings, ARC NY REIT, and ICAP Pacific Norwest Opportunity Fund. According to the FINRA complaint, Diaz earned between 7 and 10% commission, while the client saw more than $400,000 in losses to his principal.
According to public records, a former customer of IBN Financial Services, Inc. and Diaz filed a FINRA arbitration claim for $100,000 to $500,000 for violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision, and unsuitable investments in high-risk private placements, including:
- Bakken Drilling Fund III, LP
- Carter Validus
- ARC New York REIT Inc.
In April 2018, FINRA barred Diaz after he failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.
In April 2017, the New Jersey Bureau of Securities expelled Diaz and revoked his registration.
In November 2015, FINRA suspended Diaz after he failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.
In June 2015, the Pennsylvania Department of Banking and Securities permanently revoked the agent registration of Diaz and sanctioned him to a monetary penalty of $10,000 after it was found that he allegedly “engaged in dishonest or unethical practices in the securities business and took unfair advantage of PA customers, and has in connection with the offer, sale or purchase of a security in PA, directly or indirectly employed a device, scheme or artifice to defraud, and made untrue statements of material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. In doing so, respondent has engaged in acts, practices or courses of business which operated or would operate as a fraud or deceit upon PA residents, and induced or attempted to induce the purchase or sale of securities by means of a manipulative, deceptive, or fraudulent scheme.”
In May 2015, FINRA barred Diaz after he was named a respondent in a FINRA complaint alleging that he did not have a reasonable basis for recommending that customers make variable annuity exchanges. According to the complaint, “Diaz failed to make an individualized assessment of the advantages and disadvantages of the recommended exchanges and failed to understand the features of the variable annuity product. The complaint also alleges that Diaz falsified or caused the falsification of the reported net worth of customers in order to make it appear that they satisfied the minimum net worth requirements for certain alternative investments or the prohibitions against investing more than 10 percent of a customer’s assets into a single illiquid product. Diaz misled or attempted to mislead his member firms and the alternative investment product issuers to believe that these customers were eligible to purchases the investments under the terms established, when in fact they were not. Diaz attempted to induce an insurance company to transfer a customer’s variable annuity to his control by altering or causing the alteration of the signature date on a transfer authorization form. The complaint further alleges that Diaz intentionally or recklessly made untrue statements of material fact by falsely telling five customers that one or more of the alternative investments were guaranteed to pay a specific rate of return and telling two customers that the investments were guaranteed.” The complaint further alleges that Diaz “falsified or caused the use of falsification of net worth, income, assets, and/or risk tolerance information for nine customers, and forged the signature of one customer. Moreover, the complaint alleges that Diaz made unauthorized trades in the accounts of customers.”
Diaz has been the subject of 49 customer complaints between 2004 and 2019, eight of which were denied, two were closed without action, and one was withdrawn according to his CRD report. Some recent complaints include:
January 2019. “Clients were sold unsuitable investments.” The case is currently pending.
August 2018. “Unsuitable Recommendations.” The customer sought $500,000 in damages and the case was settled for $45,000.
June 2018. “Unsuitable Recommendations.” The customer is seeking $100,000 in this pending customer complaint.
June 2018. “Suitability, Failure to Supervise.” The customer sought $400,000 in damages and the case was settled for $40,000.
May 2018. “Unsuitable Recommendations.” The customer sought $500,000 in damages and the case was settled for $65,000.
December 2017. “Client alleges that RR made a poor recommendation, asked her and her husband to sign blank documents, overstated their net worth and income, put false information on their documents, and misled them.” The customer sought $94,918 in damages and the case was settled for $45,000.
November 2017. “Anthony Diecidue, and Sally Diecidue allege violations of common law causes of action for breach of fiduciary duty, negligent supervision, and negligence. the wrongful conduct of its registered representative Anthony Diaz.” The case was settled for $37,000.
September 2017. “Client alleges forged investment documents.” The case was settled for $45,000.
May 2016. “Diaz was named in a customer complaint that asserted the following causes of action: damages arising from suitability, fraud, negligent misrepresentation and omission, violation of FINRA rules and Blue Sky laws, lack of supervision, and respondeat superior.” The customer sought $2.4 million in damages and the customer was awarded $1,033,166 in compensatory damages, $2,892,864 in punitive damages, and $413,266 in attorney fees.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, IBN Financial Services, Inc. may be liable for investment or other losses suffered by Diaz’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.