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Were You a Victim of Former Comprehensive Asset Management and Servicing, Inc. Financial Advisor Tamara Steele’s Scheme?

Posted on Thursday, October 18th, 2018 at 8:44 am    

Former Comprehensive Asset Management and Servicing, Inc. financial advisor Tamara Steele (CRD# 3227494) is accused of recommending unsuitable investments in Behavioral Recognition Systems (BRS), a Houston, Texas-based software development company that has created the world’s first Behavioral Analytics technology that analyzes video content by imitating learning and memory processes of the human brain. In early 2016, BRS stopped interest payments to investors, and in March of that year, BRS sent a letter to investors stating their intention to pay interest payments due in April. However, BRS underwent restructuring in March 2016 and rebranded itself as Giant Gray and the company never made interest payments to investors.

Steele was registered with Comprehensive Asset Management and Servicing, Inc. in Pendleton, Indiana from 2009 until July 2017, when she was terminated regarding, “Through a telephone call to CAMAS by her attorney, Ms. Steele self-reported having participated in private securities transactions for multiple clients without prior notice and approval from CAMAS. Our internal review confirmed the facts of Ms. Steele’s self-report.”

It is alleged that clients invested in BRS through Steele’s advisory firm, Steele Financial Inc. and that Steele solicited her clients to invest millions of dollars in BRS, touting potential earnings between 8-12%. It is reported that a former customer recently filed a FINRA complaint regarding Steele’s recommendation to invest in BRS.

According to public records, a group of investors recently filed a FINRA arbitration against Steele and Comprehensive Asset Management and Servicing, Inc., alleging that Comprehensive Asset Management and Servicing, Inc. failed to supervise Steele’s sales of BRS or conduct due diligence, while Steele solicited her clients to invest millions in BRS.

In September 2018, the Securities and Exchange Commission (SEC) alleged that from approximately December 2012 through October 2016, Steele and Steele Financial, both Indiana-based investment advisers, fraudulently recommended and sold to their advisory clients more than $13 million in extremely risky securities issued by BRS. According to the SEC, Steele failed to disclose to her clients that BRS had agreed to pay the commissions ranging from 8% to 18% of the funds raised for BRS, and illegally received hundreds of thousands of dollars in commissions for investments they solicited in BRS from both clients and non-clients.

The SEC alleges that “during the course of the Defendants’ scheme, they sold approximately $15 million in BRS and BRS-related securities to approximately 165 individuals, including $13 million to 127 of their advisory clients. Many of Steele’s clients were unaccredited retail investors, including current and former teachers and public school employees. BRS paid Steele and Steele Financial commissions in the form of cash and warrants to purchase BRS common stock, including approximately $679,000 in cash and 758,000 warrants, which at the time were worth up to $1.9 million.”

In December 2017, the SEC charged BRS and its CEO Ray Davis with fraudulently raising approximately $28 million from investors and then diverting more than $7.8 million of those proceeds for the former CEO’s personal use. According to the SEC complaint, BRS and Davis solicited investors through lies, such as that investor funds would only be used for working capital and BRS only paid Davis a nominal salary. BRS and Davis allegedly covered their tracks using fake invoices in the names of two shell companies Davis controlled, the Blackstone Group, Inc. and Afcon Communications, Inc. Davis also allegedly invented a fake company and used fictitious invoices in that company’s name to cause BRS to send payments to an antiques broker for Davis’s personal purchases.

Steele has been the subject of two customer complaints in 2017, according to her CRD report:

July 2018. “Outside Business Activities, Selling Away and Private Securities Transactions, Unsuitable Investments, Negligent Account Management, Violations of the Indiana Securities Act, Violation of Registered Investment Advisor Section of Indiana Securities Act, Sale of Unregistered and Non-Exempt Securities, Breach of Fiduciary Duty, Violations of FINRA Conduct Rules and NYSE Board Rules – Spring and Summer of 2014.” The customer sought $240,000 in damages and the case was settled for $65,000.

June 2018. “Outside Business Activities, Selling Away and Private Securities Transactions, Unsuitable Investments, Negligent Account Management, Violations of the Indiana Securities Act, Violation of Registered Investment Advisor Section of Indiana Securities Act, Sale of Unregistered and Non-Exempt Securities, Breach of Fiduciary Duty, Violations of FINRA Conduct Rules and NYSE Board Rules.” The customer is seeking $200,000 in damages and the case is currently pending.

May 2018. “Outside Business Activities, Selling Away and Private Securities Transactions, Unsuitable Investments, Negligent Account Management, Violations of the Indiana Securities Act, Violation of Registered Investment Advisor Section of Indiana Securities Act, Sale of Unregistered and Non-Exempt Securities, Breach of Fiduciary Duty, Violations of FINRA Conduct Rules and NYSE Board Rules.” The customer is seeking $500,000 in damages and the case is currently pending.

March 2018. “Outside Business Activities, Selling Away and Private Securities Transactions, Unsuitable Investments, Negligent Account Management, Violations of the Indiana Securities Act, Violation of Registered Investment Advisor Section of Indiana Securities Act, Sale of Unregistered and Non-Exempt Securities, Breach of Fiduciary Duty, Violations of FINRA Conduct Rules and NYSE Board Rules.” The customer is seeking $124,757.53 in damages and the case is currently pending.

January 2018. “Claimants allege that certain investments recommended by Ms. Steele were not suited to their investment objectives and were misrepresented.” The customer is seeking $95,000 in damages and the case is currently pending.

July 2017. “Tamara Rae Steele was named in customers’ complaint that asserted the following causes of action: outside business activities and selling away; unsuitable investments and negligent account management; violations of the Indiana Securities Act; Violation of Registered Investment Advisor Section of Indiana Securities Act; sale of unregistered and non-exempt securities; breach of fiduciary duty; violations of the FINRA Conduct Rules and NYSE Board Rules; respondeat superior; and negligence and negligent supervision. The causes of action related to Claimants’ purchase of promissory notes, common stock, preferred stock, and stock warrants of Behavioral Recognition Systems, Inc. (“BRS Labs”). BRS Labs later became Giant Gray.” The customer sought $172,408 in damages and was awarded $167,108 in compensatory damages plus $750 in costs, the $300 filing fee, and $58,000 in lawyer fees.

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.