Suspended Broker: Former Avenir Financial Group Financial Advisor Richard Gomez
Posted on Saturday, August 12th, 2017 at 9:33 am
Erez Law is currently investigating former Avenir Financial Group financial advisor Richard Gomez (CRD# 4727721) regarding unsuitable recommendations and defrauding investors in private securities transactions. Gomez has been employed by six firms since 2009:
- Avenir Financial Group in New York, New York (2013 to 2015) (firm now expelled)
- Woodstock Financial Group, Inc. in New York, New York (December 2012 to March 2013)
- Rockwell Global Capital Llc in New York, New York (January to December 2012)
- Caldwell International Securities in Nassau (June to December 2011) (firm now expelled)
- Legend Securities, Inc. in New York, New York (March 2010 to June 2011) (firm now expelled)
- U.S. Financial Investments, Inc. in New York, New York (May 2009 to March 2010)
In February 2017, FINRA suspended Gomez from acting as a broker for one year after he consented to the sanction and to the entry of findings that he engaged in several types of misconduct in separate IRAs of three of his member firm’s customers. According to the Acceptance, Waiver & Consent (AWC), Gomez effected discretionary trades in the IRAs of two customers without the customers’ or the firm’s prior written authorization. “The findings also stated that the trading that Gomez directed in these accounts was excessive. The turnover and cost-to-equity ratios far exceeded the thresholds indicating excessive trading. Further, the strategy was inconsistent with the investment objective of capital preservation and a moderate to moderately aggressive risk tolerance that the customers expected for their respective IRAs.” As a result of these trades, the customers experienced losses of funds, while Gomez generated considerable commissions.
The FINRA investigation also found that Gomez executed transactions that were unsuitable in a third, senior customer’s IRA, which resulted in losses and commissions and fees of $30,000. The investigation found that Gomez concentrated the customer’s assets in a single security at a time, where a negative performance in the security that he held would have drastic effects on his IRA value. FINRA also alleges that Gomez effected transactions in the customer’s IRA without his authorization, knowledge or consent.
In April 2015, FINRA opened up an investigation into Gomez, alleging that he defrauded investors of at least $499,000 through his participation in two separate schemes involving private securities transactions away from his member firm. According to the complaint, Gomez participated in the sale of membership interests in entities affiliated a foreign company, which was later determined to be fraudulent, to purchase pre-initial public offering (LPO) shares. According to the complaint, the fund manager and president of the escrow service used investor funds for personal expenses. Gomez’s fraudulent sales of the company’s membership interests totaled $394,000 and earned Gomez at least $22,000 in commissions.
“Gomez also participated in the sale to customers of shares in a private U.S. company that, along with its wholly owned subsidiaries, produced coal. The U.S. coal company’s creditors filed involuntary bankruptcy petitions against the company and several of its subsidiaries.” Gomez’s fraudulent sales of the coal company’s stock totaled at least $105,000 and earned Gomez at least $14,950 in commissions.
The FINRA complaint alleges that Gomez recommended these interests to investors without disclosing the numerous material, adverse facts relating to the foreign company, and entities affiliated with it alleged in the complaint, including the criminal history and securities fraud and civil lawsuits against its principals. It is also alleged that Gomez failed to conduct a reasonable investigation and due diligence of the foreign company and its affiliated entities. This case is currently pending.
Gomez has been the subject of three customer complaints between 2015 and 2016, according to his CRD report:
July 2016. “Inadequate supervision, negligently failed to research RRs background, negligently hired RR, negligently failed to place RR on heightened supervision, sale of high-risk and fraudulent investments to claimant, violation of federal securities law, violation of NY Consumer Protection Act — NY General Business Law secton (sp) 349, Breach of Contract, Common Law Fraud, Breach of Fiduciary Duty, Negligence and Gross Negligence.” The customer is seeking $100,001 in damages and the case is currently pending.
January 2016. “Unauthorized trading, Excessive commission, churning, suitabiliy (sp).” The customer is seeking $110,000 in damages and the case is currently pending.
June 2015. “Statement of claim alleges: violation of ny consumer protection act and ny business law 349, breach of contract, common law fraud, negligence and gross negligence, misrepresentation.” The customer sought $110,000 in damages and the case was settled for $150,375.98.
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, Avenir Financial Group may be liable for investment or other losses suffered by Gomez’s customers.
Erez Law represents investors in the United States for claims against former Avenir Financial Group financial advisor Richard Gomez, regarding defrauding investors in private securities transactions. If you were a client of Avenir Financial Group or another firm, 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.