In January 2018, FINRA awarded a group of 17 investors $4.3 million, alleging that former First Allied Securities Inc. financial advisor Anthony Diaz (CRD# 4131948) put their retirement savings into risky, unsuitable investments. Diaz and First Allied Securities Inc. must pay $1,033,166 in compensatory damages, $2,892,864 in punitive damages and $413,266 in attorneys fees. The investors were mostly elderly and looking to invest their nest eggs, and the majority worked with Diaz in East Stroudsburg, Pennsylvania.
The claim 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 causes of action relate to various securities.
Diaz was registered with 11 firms in just 14 years. Most recently, he was registered with IBN Financial Services, Inc. in Scotrun, Pennsylvania from 2012 to 2015, with Sandlapper Securities, LLC in Scotrun, Pennsylvania from March to September 2012 and with International Financial Solutions, Inc. Scotrun, Pennsylvania from August 2011 to March 2012.
Diaz was also terminated from employment at previous firms from earlier in his career including:
- Sandlapper Securities LLC 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.”
- Kovack Securities, Inc. regarding “Firm received written and verbal complaints alleging that Mr. Diaz entered unauthorized trades in their accounts.”
- Sii Investments, Inc. regarding “Violated the firm’s prohibition against unauthorized trading.”
- Edward Jones regarding “Provide inaccurate information to field supervisor.”
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 after it was found that he “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.” Diaz was also sanctioned to a $10,000 monetary fine.
Diaz has been the subject of 42 customer complaints between 2004 and 2014, seven of which were denied, one was withdrawn and two were closed without action, according to his CRD report. Some recent cases include:
- 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 is seeking $94,918 in damages and the case is currently pending.
- May 2016. “Claimants allege that Mr. Diaz misrepresented guaranteed payments of interest, violated suitability requirements, falsified liquid and net worth information, inflated income, guaranteed returns, and forged or cause to be forged certain blank account documentation beginning in 2003.” The customer sought $144,712 in damages and the case was settled for $86,450.
- 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 client was awarded $2.4 million.
- April 2016. “Claimants allege Mr. Diaz misrepresented guaranteed payments of interest, violated suitability requirements, falsified liquid and net worth information, inflated income, and misrepresented certain financial documentation beginning in 2007.” The customer sought $187,840 in damages and the case was settled for $114,265.
- February 2016. “Customer alleges former advisor of SII sold him unsuitable DPP Investment.” The customer sought $50,000 in damages and the case was settled for $10,500.
- July 2015. “Clients allege multiple bds allowed representative to invest in high commissioned, unsuitable, illiquid products, including a-share mutual funds.” The customer is seeking $500,000 in damages and the case is currently pending.
- July 2015. “Claimants allege misrepresentation, breach of fiduciary duty, negligence, and unsuitability regarding their purchase of variable annuities and DPPS between late 2005 and 2009.” The customer sought $100,000 in damages and the case was settled for $60,000.
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, First Allied Securities 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.