Can I Recover Losses from Former Park Avenue Securities LLC Broker Lizabeth Gotuaco Ty?
Posted on Monday, March 6th, 2017 at 4:40 pm
Erez Law is currently investigating Park Avenue Securities LLC financial advisor Lizabeth Gotuaco Ty (CRD# 4737319), also known as Beth Ty, regarding the sale of unregistered securities. Ty was registered with Park Avenue Securities in Houston, Texas from 2009 to 2015. Ty was permanently barred from FINRA in May 2016 from acting as a broker or otherwise associating with firms that sell securities to the public after FINRA found that she failed to provide documents and information that FINRA requested during its investigation.
Recently, Ty’s former customers, a married couple from Texas who jointly run a church, alleged that they made investments on behalf of the church with Ty using money from the church’s parishioners. The inexperienced investors allege they were looking to invest to pay off student debt and starting a college savings plan for their two children. It is alleged that Ty recommended her former customers invest in what she deemed guaranteed high yield investments with Frederick Alan Voight and Daystar Funding. Voight offered notes through Daystar to fund InterCore’s Driver Alertness Detection System. It is alleged that Ty described these funds as protected and not subject to market volatility and able to generate high rates of return. Based on Ty’s recommendations, her former customers invested their life savings of $265,000 from their personal IRA and $1.7 million from the church. It is alleged that Ty did not question obvious red flags of promises of 40% interest on investments in a business opportunity involving a Driver Alertness Detection System with InterCore, Inc., a publicly traded company that develops real-time safety technology. This investment turned out to be a Ponzi scheme – a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
FINRA rules and brokerage firm compliance rules strictly prohibit brokers from selling investments that are not approved by the brokerage firm with whom the broker is employed or licensed. “Selling away” occurs when a broker sells or solicits the sale of securities not offered and vetted by the broker’s brokerage firm, which is a violation of securities regulations. When a broker sells away, the customer generally does not purchase the investments through the broker’s corresponding brokerage firm. These investments are typically private placements or other non-public investments. Typically, selling away can conceal fraudulent activities, such as Ponzi schemes. The brokerage firm is responsible for supervising its brokers and may be held liable for selling away due to negligent supervision or for its agent’s conduct under theories of principal and agent liability.
In July 2015, the Securities and Exchange Commission (SEC) found Voight and Daystar Funding to be running a Ponzi scheme. It was found that Voight offered notes through Daystar from 260 investors nationwide with promises that the investors’ money would be used to fund a Driver Alertness Detection System with InterCore, Inc. The SEC charged Voight with defrauding more than 300 investors across the country with promissory note offerings totaling $114 million. There is still $22 million in investments to date from unknown investors.
Ty has also been the subject of three customer complaints in 2016, according to her CRD report:
April 2016. “Claimants allege that their registered representative sold them unregistered promissory notes in the amount of $250,000.” The customer seeks $250,000 in damages.
March 2016. “Claimants allege that their registered representative sold them unregistered promissory notes in the amount of $500,000.” The customer seeks $500,000 in damages.
February 2016. “Claimants allege that their registered representative sold them unregistered promissory notes in the amount of $400,000.” The customer seeks $400,000 in damages.
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, Park Avenue Securities may be liable for investment or other losses suffered by Ty’s customers.
Erez Law represents investors in the United States for claims against Park Avenue Securities LLC financial advisor Lizabeth Gotuaco Ty, who is alleged to sell unregistered securities to her customers. If you were a client of Park Avenue Securities LLC financial advisor Lizabeth Gotuaco Ty or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.