Juan Carlos Parets, of New York, New York, was named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he violated his suitability obligations, made material misstatements, and omitted material facts in connection with the sale of promissory notes issued by his firm's, New York, New York based Westrock Advisors, Inc., parent company, Westrock Group, Inc., which defaulted on the payments it owed to retail investors. FINRA alleges that Mr. Parets did not have a reasonable basis for recommending the promissory notes to any customer and did not take any meaningful steps to understand Westrock Group's financial condition prior to selling the notes, such as reviewing financial statements or other financial information. Mr. Parets allegedly recommended the notes to specific customers for whom the speculative investment was unsuitable. FINRA further alleges that Mr. Parets made misstatements and omissions concerning material facts, including the actual financial condition of the Westrock Group, his lack of understanding of the financial condition of Westrock Group, and the safety of the promissory note investments. In addition, the complaint alleges that Mr. Parets failed to conduct a reasonable investigation of Westrock Group to determine whether the securities being offered were suitable for recommendation to any customer. Moreover, the complaint alleges that Mr. Parets did not have reasonable grounds to believe that his recommendations to customers were suitable on the basis of the facts the customers disclosed as to the customers' other securities holdings and financial situation and needs. Furthermore, the complaint alleges that Mr. Parets sold unregistered promissory notes, as there was no registration statement in effect under the Securities Act of 1933 when the sales occurred. The alleged sales constituted an unregistered distribution of securities and did not qualify for an exemption from registration. In connection with the alleged sales, FINRA alleges that Parets sold the notes to unaccredited investors in spite of red flags indicating that this would constitute taking part in an illegal unregistered distribution.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to a violation of the above mentioned duties, obligations, and industry rules can bring forth claims to recover losses against broker-dealers like Westrock Advisors, which should prevent its brokers from committing the above described illegal acts. Have you suffered losses in your Westrock Advisors, Inc. and/or Westrock Group, Inc. account due to broker misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
No comments:
Post a Comment