Erez Law recently filed a FINRA arbitration against PFS Investments Inc. related to selling away.
The complaint was related to investments with Michael Archimede (CRD# 5701306). He has been registered with PFS Investments Inc. in Waukesha, Wisconsin, from 2010 to 2023, when he was terminated regarding, “At the time the representative terminated for failing to renew his securities licenses, he was under internal review based on allegations that he borrowed money from a customer. This filing corrects the termination to show that he was permitted to resign during an internal review after he admitted to borrowing money from a customer.”
The Erez Law client, an inexperienced investor, alleges the following in the newly filed FINRA claim:
After meeting the client in 2021, he began aggressively soliciting him to invest with him. In order to induce the client to invest with him, he aggressively touted his own abilities and represented, amongst other things, that he could achieve superior results than the client was currently experiencing with his current financial advisor.
Erez Law alleges that he engaged in an illicit selling away scheme involving promissory notes whereby he improperly “borrowed” funds from the client and other PFS Investments Inc. clients.
It is alleged that PFS Investments Inc. is responsible for his wrongful conduct which caused the client losses of $80,000.
According to the claim, he solicited the client to invest $80,000 in promissory notes guaranteed by the broker. The proceeds were purportedly to be used for the purpose of permitting him to invest the funds and pay the client the profits. He represented to the client that he would invest the funds and distribute the profits to the client on a monthly basis. He further represented that the client could terminate the investment and obtain the full return of his entire $80,000 at any time. Based on his representations and assurances, the client agreed.
It is alleged that he recommended, sold and participated in this private securities transaction without PFS Investments Inc.’s required approval. By recommending and selling an unapproved investment, the firm did not do any required due diligence on the investment and it was therefore unsuitable. He also allegedly engaged in an undisclosed outside business activity and violated FINRA rules. He allegedly failed to disclose his involvement in selling promissory notes to PFS Investments Inc. customers.
He allegedly failed to disclose to the client that his involvement in this illicit scheme was strictly prohibited by PFS Investments Inc. and FINRA rules. As such, the firm failed to adequately supervise the broker.
It is alleged that even after the firm found out about his activities and he had already been under “internal review,” he solicited the client to invest in his illicit promissory note scheme. The complaint alleges that he used text messaging on his personal mobile device to communicate with his PFS Investments Inc. clients, including the client, about PFS Investments Inc. business and his illicit promissory note scheme.
In January 2024, FINRA barred him after he consented to the sanction and to the entry of findings that he refused to provide information and documents and to appear for on-the-record testimony requested by FINRA. FINRA found that he borrowed customer funds in a potential investment in a crypto offering.
Michael Archimede Customer Complaints
He has been the subject of two customer complaints between 2023 and 2024, according to his CRD report:
June 2024. “Michael Archimede allegedly borrowed money from [redacted] on or around December 12, 2023.” The customer is seeking $173,000 in damages, and the case is currently pending.
November 2023. “Client alleged representative borrowed funds from her investment account which had not yet been repaid.” The customer sought $52,482.12 in damages, and the case was settled for $66,646.47. The complaint was regarding mutual funds.
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, PFS Investments Inc. may be liable for investment or other losses suffered by Michael Archimede’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you 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.
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