South Florida Arbitration & Litigation Lawyer Blog
FINRA Promissory Note Fraud Arbitration Attorney, Russell L. Forkey, Esq.
July, 2011:
Bart Chad Christensen (CRD #2956167, Registered Representative, South Jordan, Utah) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Christensen consented to the described sanction and to the entry of findings that he sold approximately $650,000 in a company’s promissory notes to customers without providing his member firm with written notice of the promissory note transactions and receiving the firm’s approval to engage in these transactions. The findings stated that based upon expected interest payments from the promissory notes, some of the customers also purchased life insurance policies from Christensen and another registered representative the firm employed. The findings also stated that these customers expected to use the promissory note interest payments to pay for the life insurance premiums. The findings also included that Christensen received direct commissions from the company related to the sale of the promissory notes to customers and received commissions from the sale of life insurance products to the customers, who intended to fund those policies with the interest payments from the promissory notes.
FINRA found that the company defaulted on its obligations and the customers lost their entire investment. FINRA also found that the customers who also purchased life insurance based upon the expectation that they would receive interest payments from their investment relinquished their policies and the firm compensated them for the premiums paid, but the customers did not receive any reimbursement for the investments in the company that sold the promissory notes. In addition, FINRA determined that Christensen completed a firm annual compliance questionnaire, in which he falsely stated that he had not been engaged in any capital raising activities for any person or entity; had not received fees for recommending or directing a client to other financial professionals; had not been personally involved in securities transactions, including promissory notes, that the firm had not approved; and had not assisted a client with an application for investments not available through the firm or contracted or otherwise acted as an intermediary between a client and a sponsor of such investments without the firm’s prior approval. Moreover, FINRA found that Christensen failed to respond to FINRA requests for documents and testimony.(FINRA Case #2009018990002).