Customers of Darrell Smith, Cetera Advisors Could Recover Losses

by InvestorLawyers on August 22, 2013

in Arbitration,FINRA,Variable Annuities

Investment fraud lawyers are currently investigating claims on behalf of investors who purchased I-Lenders and Energae from Darrell Duane Smith, a former broker for Cetera Advisors (previously known as Multi-Financial Securities). Allegedly, Smith was investigated for “selling away” securities of either I-Lenders and/or Energae to Multi-Financial customers.  “Selling away” is a term describing circumstances when a registered representative or financial advisor associated with a brokerage firm sells securities not sponsored by the brokerage firm to the brokerage firm’s customers.

Customers of Darrell Smith, Cetera Advisors Could Recover Losses

Reportedly, Smith was issued a Cease and Desist Order on April 10, 2013 in connection with his sales of I-Lenders, also known as Interested Investors LLC, and Energae. Following this order, another order was re[prtedly issued on July 3 permanently barring Smith for applying for insurance producer and securities agent licenses and ordering him to pay a $5,000 civil penalty.

Smith’s securities license stated that “after receiving copies of letters written by [Smith] relating to investments in a limited partnership, [Cetera] is reviewing [Smith’s] business to determine whether he had any involvement in limited partnership investments away from the firm without first giving the Firm notice or obtaining the Firm’s approval.” Following this investigation, in March of 2012, Cetera reportedly allowed Smith to resign after “a client alleged he signed a variable annuity application with the client’s consent, which is in violation of the firm’s policies.”

According to securities arbitration lawyers, Financial Industry Regulatory Authority Rules have established that firms must properly supervise brokers’ activities while they are registered with the firm. Because Smith was registered with Multi-Financial Securities, now known as Cetera, from February 2001 until March 2012, investment fraud lawyers say that Cetera could potentially be held responsible for Smith’s activities during that time and, thus, could be ordered to compensate his clients for losses sustained for the period he was registered with the firm.

If you were a client of Darrell Smith and suffered significant losses as a result of your purchase of I-Lenders and/or Energae investments, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C.  at (866) 966-9598 for a no-cost, confidential consultation.

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