In an order, the SEC found that from approximately November 1999 through February 2007, Prime Capital Services, a broker-dealer that Gilman Ciocia acquired in 1999, offered and sold variable annuities that were unsuitable investments for elderly customers due to the customers’ ages, liquidity and investment objectives.

The order also found that Gilman Ciocia aided and abetted the broker-dealer’s fraud by arranging and marketing free-lunch seminars in the South Florida area at which Prime Capital Services registered representatives recruited elderly customers whom they later induced to buy variable annuities. The SEC further found that Prime Capital Services failed to implement the firm’s supervisory procedures in a way that reasonably could be expected to detect and prevent the registered representatives’ violations of federal securities laws.

The SEC issued an order censuring both Prime Capital Services and Gilman Ciocia, and ordered them to cease and desist from violating securities laws. Prime Capital Services was also ordered to disgorge $97,389.05, plus $46,873.53 in prejudgment interest, while Gilman Ciocia was ordered to pay a civil monetary penalty of $450,000 to be paid in three installments.

In addition, Prime Capital Services and Gilman Ciocia have agreed to take several steps, including hiring an independent compliance consultant to review and recommend changes to Prime Capital Services’s supervisory procedures; restricting some representatives from involvement in variable annuity sales until the independent compliance consultant has completed its review; refunding the variable annuity fees incurred by certain elderly customers of particular registered representatives; and giving notice of the settlement to elderly customers who bought variable annuities from particular registered representatives in the past five years.

Prime Capital Services and Gilman Ciocia consented to the issuance of the order without admitting or denying any of the findings.

According to Prime Capital Services’ FINRA Broker Report (CRD), the SEC investigation is not the first time that the firm has been named in a securities related investigation. In fact, it appears that the firm has been named in at least 6 regulatory investigations and 7 customer complaints.

If you have questions regarding investments you made with Prime Capital Services or Gilman Ciocia, or if you believe that you have been the victim of a securities fraud, The White Law Group may be able to help.

The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida. The firm has over 30 years of experience in securities litigation matters and handles matters throughout the country and Florida, including reviewing securities fraud cases in Boca Raton, Delray Beach, Boynton Beach, Lake Worth, Palm Beach, Wellington, Jupiter, Stuart, and Vero Beach. To contact the firm, please call 312-238-9650. Or, for more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

Having our office located so close to FINRA’s Southeast headquarters has its advantages, particularly since all cases filed in the southeast portion of the United States are administered out of FINRA’s Boca Raton, Florida Dispute Resolution office. In fact, any securities fraud cases filed with FINRA on behalf of a customer living in Florida, Georgia, Alabama, North Carolina, South Carolina, Mississippi, Arkansas, Tennessee, Louisiana, Virginia, Puerto Rico, Delaware, and Washington, D.C. will likely be assigned to FINRA’s Southeast Region office and administered out of the Boca Raton, Florida office.

Although located in Boca Raton, Florida, the Law Offices of David A. Carter, P.A. handles securities fraud cases throughout Florida and the country, including reviewing and handling securities fraud cases in Jupiter, Stuart, Fort Pierce, West Palm Beach, Vero Beach, Melbourne, and Wellington.

It should be noted, that in addition to Boca Raton, Florida, FINRA Dispute Resolution’s Southeast Region has hearing locations for investor claims/securities fraud cases in Atlanta, Georgia; Baltimore, Maryland; Birmingham, Alabama; Charlotte, North Carolina; Columbia, South Carolina; Ft. Lauderdale, Florida; Jackson, Mississippi; Jacksonville, Florida; Little Rock, Arkansas; Memphis, Tennessee; Miami, Florida; Nashville, Tennessee; New Orleans, Louisiana; Norfolk, Virginia; Orlando, Florida; Raleigh, North Carolina; Richmond, Virginia; San Juan, Puerto Rico; Tampa, Florida; Washington, DC; and Wilmington, Delaware. Accordingly, just because a case filed in the Southeast portion of the country is administered by FINRA’s Boca Raton, Florida office, does not mean that a customer’s case will be heard in Boca Raton. Generally speaking, FINRA will select the hearing location closest to the investor’s residence. The Law Offices of David A. Carter, P.A. is set up to handle securities fraud cases at any of FINRA’s hearing locations.

To contact the Law Offices of David A. Carter, P.A., please call 561-750-6999, or email us at contact@carterpa.com. For more information about the Law Offices of David A. Carter, P.A. or securities fraud, you can also visit our website at http://www.carterpa.com.