Cabot Lodge Securities LLC Broker Rusty Tweed Investment Losses
Posted on Tuesday, November 19th, 2019 at 2:56 pm
Did you lose money investing with Cabot Lodge Securities LLC broker Robert Russel Tweed (CRD# 2339324), aka Rusty Tweed? Tweed has been registered with Cabot Lodge Securities LLC in San Marino, California since October 2015.
Previously, Tweed was registered with Concorde Investment Services, LLC in San Marino, California from 2011 to 2015. Before then, Tweed was registered with five other brokerage firms between 2005 and 2011. In 2005, Tweed was terminated from National Planning Corporation in Los Angeles, California regarding, “Violations of NASD Conduct Rule 2210.”
In October 2017, the Securities and Exchange Commission (SEC) filed fraud charges against Tweed and his company Tweed Financial Services, Inc., a California advisory firm, with misleading investors about the profitability of a fund they managed until SEC examiners discovered the fraud. The SEC investigation found that in 2008 Tweed Financial Services, Inc. and Tweed formed and managed an investment fund, Athenian Fund, L.P., which was used a “feeder” to invest in a specific, unrelated fund that purported to employ a quantitative stock trading strategy. And by 2010, it is alleged that the fund raised approximately $1.7 million from 22 investors, some of whom had more than one account in the fund. Tweed Financial Services, Inc. and Tweed later moved money into a completely different fund, the Quantitative Analytics Master Fund, which was operated by a business acquaintance of Tweed. Later in October 2010, it is alleged that Tweed Tweed learned that approximately 40% of Athenian Fund’s investment in QAMF had not been invested in any stock at all, but was instead purportedly tied up in a one-year loan to a third party. According to the SEC’s findings, the defendants then caused the Athenian Fund to invest a portion of that returned capital in a software business run by a friend of Tweed. According to the SEC, “Neither of these investments-QAMF or the software business-were profitable. In fact, by 2012, Tweed was on clear notice that the purported promissory note held by QAMF was uncollectible, and the funds had been further conveyed to invest in a gold mining venture in Ghana. In 2012, Tweed also learned that the QAMF manager had been indicted for bank fraud. And by 2013, Tweed knew that the software business had filed bankruptcy. These investments, therefore, should have been written down and eventually written-off. Rather than notify the Athenian Fund’s investors of the change in investment strategy and the losses on those investments, TFSI and Tweed continued to send quarterly account statements to the Athenian Fund’s investors falsely claiming flat or positive income and returns on these underperforming investments. TFSI and Tweed also concealed the fact that Athenian Fund assets were held in illiquid, unprofitable investments when it allowed some investors to receive full redemptions based on the inflated value of the Athenian Fund’s assets.”
In April 2017, Tweed was named a respondent in a FINRA complaint alleging that he obtained more than $1.6 million from his retail customers through a false and misleading private placement memorandum (PPM) he used to offer and sell interests in a pooled investment fund that he both created and controlled and as a result of the conduct alleged herein.
Tweed has been the subject of 13 customer complaints between 2002 and 2019, three of which were closed without action and one was withdrawn, according to his CRD report. Recent complaints are regarding:
August 2019. “Client is alleging misrepresentation and suitability relating to investment made in March of 2015.” The customer is seeking $1,423,796 in damages and the case is currently pending.
May 2019. “Unsuitable recommendations.” The customer is seeking $500,000 in damages and the case is currently pending.
May 2018. “Client is alleging poor performance relating to an investment in Vertical US Recovery Fund II.Client has also alleged misrepresentation against the offeror, Vertical US Recovery Fund II.” The customer is seeking $75,000 in damages and the case is currently pending.
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, Cabot Lodge Securities LLC may be liable for investment or other losses suffered by Tweed’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.