Were you the victim of Westpark Capital, Inc. broker Richard Rappaport (CRD# 1885122)? Richard Rappaport has been registered with Westpark Capital, Inc. in Los Angeles, California since 1999.
In November 2021, FINRA suspended Richard Rappaport for 15 months from any principal capacity and four months in any capacity and was sanctioned him to pay a $30,000 civil and administrative penalty. According to FINRA, “Rappaport consented to the sanctions and to the entry of findings that he made negligent misrepresentations and omissions in connection with the sale of promissory notes issued by his member firm’s parent company. The findings stated that the firm provided investors with offering documents, which were approved by Rappaport, that contained material misrepresentations and omitted material facts. The offering documents failed to disclose that the parent company had defaulted on the line of credit and had defaulted on successive forbearance agreements with the bank, or that the bank had sued the parent company and Rappaport. Similarly, the offering documents failed to disclose that the parent company had net operating losses each year from 2012 through 2016. In addition, the firm sent prospective investors a misleading historical analysis document, created by Rappaport, that claimed to show investors what they would have received as a return on the notes if the notes had been purchased in 2006 and held through 2010. In fact, the return displayed did not explain that the calculation was based upon hypothetical returns from distinct investments and not any actual return from the notes. The firm, through Rappaport, also represented to prospective investors that they would be entitled to share in pro-rata distributions of equity and profits from the firm. In fact, the noteholders were entitled to share in pro-rata distributions of equity and profits from the parent company, not the firm, which at times had higher profits and greater equity-producing opportunities than the parent company. Moreover, the firm, through Rappaport and other firm representatives, failed to disclose material conflicts of interest. The firm and Rappaport failed to disclose to prospective investors that Rappaport had sole discretion as to whether the parent company’s subsidiaries would make distributions to the parent. The findings also stated that the firm and Rappaport failed to supervise the parent company offerings. The firm, acting through Rappaport, failed to take reasonable steps to ensure that the two firm representatives who solicited investments in the notes understood the terms of the notes. The firm and Rappaport did not provide reasonable training to the registered representatives about the notes and did not respond reasonably to questions from customers that raised red flags that customers lacked accurate information about the notes.”
Westpark Capital, Inc. faces three previous regularly sanctions in 2003 and 2006.
Richard Rappaport Faces One Customer Complaint
Richard Rappaport has been the subject of one customer complaint, according to his CRD report:
June 2020. “Client named CEO of WestPark Capital, Richard Rappaport, claiming failure to supervise.” The customer is seeking $1 million in damages and the case is currently pending. The complaint was regarding private placements and common and preferred stocks and took place while Richard Rappaport was registered with Newport Coast Securities and Westpark Capital Inc.
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, Westpark Capital, Inc. may be liable for investment or other losses suffered by Richard Rappaport’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.