South Florida Arbitration & Litigation Lawyer Blog
Private Placement and Outside Business Activity Fraud, Mismanagement and Misrepresentation FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
February, 2011:
Earnest Evan Bridges Sr. (CRD #5643149, Registered Rep., Cheltenham, Maryland) 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, Bridges consented to the described sanction and to the entry of findings that he learned of an investment that would purportedly provide a 100 percent return on a $70,000 investment after a month. To facilitate the investment, the funds were to be wired to an escrow account and a third party would withdraw the funds from the account. Bridges recommended to at least a couple of individuals, including a member firm customer, that they invest through him. The findings stated that Bridges promised the individuals a 50 percent return and failed to inform them that he intended to keep the other 50 percent for himself. The findings also stated that without conducting any due diligence, Bridges told the firm customer that the investment was insured and riskfree, which were material misstatements. The findings also included that the investment opportunity was a fraud, and the customers lost all of their money. FINRA found that despite Bridges’ assurances to the contrary, the firm customer paid in excess of $10,000 in surrender charges and tax penalties as the result of liquidating her annuity and taking a withdrawal from her IRA. FINRA also found that the firm prohibited its registered representatives from participating in any manner in the sale of any security, registered or unregistered, that was not processed through the firm, without prior written approval. Without seeking prior written approval from his firm, Bridges entered into a promissory note with a customer. In addition, FINRA determined that the customer sent a written complaint to Bridges, demanding payment of the promissory note which he did not report to his firm. (FINRA Case #2010023213901).