According to a FINRA disciplinary action announcement, Jaime Andres Diaz (CRD #4298373, New York, New York) recently was barred from association with any FINRA member in any capacity and ordered to pay a total of $600,000, plus interest, in restitution to customers.
The sanctions were based on findings that Diaz willfully misrepresented and omitted material facts in connection with the purchase and sales of securities. The findings stated that Diaz misrepresented to customers and a co-worker that he would purchase securities with their funds when he never intended to do so. Diaz fraudulently solicited and received $900,000 from customers and the co-worker, and kept the vast majority for his own use. Diaz converted the funds to his own use and benefit, made monetary payments to friends and covered office expenses. Diaz also concealed from investors negative financial information, the risk of loss of principal, known delays in ventures’ business plans, his own failures to conduct due diligence, and his lack of authority to sell some of the products involved. Diaz convinced customers to sell securities or borrow against securities held in their accounts.
The findings also stated that Diaz engaged in private securities transactions in the form of promissory notes without providing his member firm with prior written notification of these sales, including describing the proposed transactions to the firm and his proposed role in the sales, and he failed to obtain prior authorization from the firm before making the sales. Diaz also misrepresented on an outside business disclosure form maintained in CRD that he was involved in outside businesses, but did not identify the sale of promissory notes as outside business activities, and inaccurately identified an entity as non-investment related, even though he solicited customer’s investments in that entity. Diaz falsely represented on his firm’s compliance questionnaire that his outside business disclosure form in CRD was correct and provided false answers on the questionnaire. The findings also included that Diaz provided untimely and incomplete responses to repeated FINRA requests for information and failed to respond in any manner to a FINRA request for information.
For the full findings, see FINRA Case #2011029545902.
According to his FINRA Broker Report, Diaz was registered with Gunnallen Financial from December 2003 through August 2007 and with National Securities Corporation from July 2007 through December 2011.
The foregoing information, which is all publicly available on FINRA’s website, is being provided by The White Law Group.
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