The Financial Industry Regulatory Authority (FINRA) issued a news release on March 7, 2013 announcing that it had permanently barred Mr. Jeffrey Brett Rubin from the securities industry as a result of his unsuitable investment recommendations and unapproved securities transactions to 31 NFL Players. In FINRA’s news release and in the underlying Letter of Acceptance, Waiver and Consent (AWC), FINRA detailed that Mr. Rubin was recommended that one of his clients, an NFL player, invest $3.5 million, a majority of his liquid net worth, in to high-risk securities, including a large $2 million investment in an Alabama casino, resulting in losses of approximately $3 million.
Moreover, Mr. Rubin is alleged to have sold this investment away from his firms Lincoln Financial Advisors Corporation and Alterna Capital Corporation, where he was successively licensed as a broker between March 2006 and June 2008. Alterna Capital Corporation terminated or withdrew its FINRA registration on September 24, 2009, according to its FINRA CRD report.
According to reports, Mr. Rubin apparently continued to refer additional NFL players while registered as a broker with Alterna and International Assets Advisory, LLC. In total, FINRA found that over about a three year period, Mr. Rubin referred approximately 30 players, who invested approximately $40 million in the same Alabama casino project. For his referrals, Mr. Rubin was given a 4% ownership stake in the casino project, as well as $500,000 from the project promoter, seemingly placing his interests ahead of his clients.
Mr. Rubin operated Pro Sports Financial, a Florida-based company, claiming to provide financial related “concierge” services to professional athletes. Mr. Rubin further disclosed that in April 2008, the Internal Revenue Service filed a federal tax lien against Mr. Rubin for over $400,000. A second federal tax lien was filed in June 2009. It is reported that Mr. Rubin failed to disclose these liens on his Form U4, a violation of several FINRA Rules.
Brokers are required by FINRA Rules and securities laws to only recommend investments that are suitable to their clients, and must make an investigation as to each client’s financial background in order to do so. Further, brokers must notify their employing firms of each investment they recommend and each business they intend to work for outside of their primary employment through which they are registered.
In one comparable matter successfully recently handled by Malecki Law, a case on behalf of about 80 individuals was led to successful completion related to a Ponzi scheme “sold away” from his employing brokerage firm, similar to Mr. Rubin. That case was perpetrated by Mr. Robert Van Zandt from the Bronx, New York, who was a registered person and ran an accounting office in the Bronx for over twenty years, and since at least 2000 was involved to some degree in real estate investment. He solicited individuals for his “investments” from his tax preparation business, marketing the investments in “real estate” as safe, guaranteed and producing a 9% annual interest return. During the time that he sold his “investments,” Mr. Van Zandt was a registered representative of a major FINRA-registered broker-dealer. Malecki Law’s action raised causes of action including the broker-dealer’s failure to supervise Mr. Van Zandt’s actions, which resulted in and caused losses to Malecki Law’s clients.
The attorneys at Malecki Law engage in securities litigation and arbitration in forums such as FINRA, which is what it looks like some of these NFL players may need help with. If you believe you have lost money as a result of inappropriately marketed or unsuitable investments, please contact an attorney at Malecki Law to determine if you may be able to recover some or all of your losses.
FINRA’s March 7, 2011 News Release can be found here.