Erez Law is investigating claims regarding David Lee Shafranek (CRD #2919901, Long Beach, New York). Shafranek recently submitted an AWC in which he was fined $10,000 and suspended from association with any FINRA member in any capacity for 20 business days. See FINRA Case #2014040781601. Shafranek was associated with Citigroup Global Markets, Inc. (Bronx, NY)from May 2007 until his termination in April 2014. The Form U-5 filed by Citigroup to terminate Shafranek’s registration states that “A customer complained that RR asked him to participate in a side business opportunity not related to Citi. Following that complaint, other customers to whom equity and bridge loan agreements were provided were discovered. 5. Product types: other: equity subscriptions and bridge loans.” Shafranek currently is associated with Prospera Financial Services, Inc. (White Plains, NY).
FINRA found that Shafranek participated in private securities transactions by soliciting at least four of his firm’s customers to invest in a digital media start-up company without Citigroup’s knowledge or approval. The findings stated that the firm’s policies and procedures prohibited its registered representatives from participating in private securities transactions not associated with the firm. In entering into the AWC , Shafranek neither admitted or denied FINRA’s findings.
In response to the comment placed on Shafranek’s license by Citigroup regarding his termination, Shafranek stated “I didn’t solicit any client for or sell any product not offered on citigroup’s platform. When a few of my best clients asked if I had seen anything ‘new and exciting’ I put them in contact with an individual they could talk to if they so chose. I did not participate in the client’s due diligence or decision making nor did I offer my opinion or help with any subscription paperwork or receive any compensation of any kind. I gave them an idea, not advice or a recommendation.”
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, Citigroup or Prospera may be liable for investment or other losses suffered by Shafranek’s customers.
If you were a client of Citigroup or Shafranek, and have suffered investment losses, financial irregularities or unauthorized transactions in your account, please contact Erez Law to explore your legal options. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 888-840-1571 or complete our “contact form.”