Cabot Lodge Securities Broker Barred for Making False and Misleading Statements to InvestorsFriday, January 3, 2020
On December 11, 2019, the National Adjudicatory Council (NAC) reached a Decision for the Complaint brought forth by the Financial Industry Regulatory Authority (FINRA) against Robert Tweed, a San Marino, California resident and broker.
In an Extended Hearing Panel Decision released on July 5, 2018, the Financial Industry Regulatory Authority (FINRA) Office of Hearing Officers recently found that Robert (“Rusty”) Tweed, a former CapWest Securities, Inc. general securities representative, violated several securities rules by making false and misleading statements to customers to induce them to invest in his hedge fund. Tweed is currently associated with Cabot Lodge Securities LLC in San Marino, California and has owned and controlled an investment advisor firm, Tweed Financial Services, Inc., since 1999.
FINRA Department of Enforcement’s original Complaint alleged that Tweed obtained more than $1.6 million from his retail customers through a false and misleading private placement memorandum (PPM) he used to offer and sell interests in Athenian Fund LP, a pooled investment fund that he created and controlled. Ultimately, 23 customers invested in the fund without an understanding of the potential fees and costs associated with the Athenian Fund, Tweed’s control over this fund, and the entities and individual who had immediate control over the money that they invested.
According to the Complaint, the person that had control over the investors’ money was committing bank fraud and engaging in fraudulent trading in an unrelated pooled investment program while handling investments for Athenian Fund LP. FINRA alleges that shortly after the Athenian Fund offering ended, this person transferred $650,000 of investors’ funds to a third party financier, purportedly to support a gold mining venture through an entity called Luminary Investment Services LLC. In total, 14 investors lost approximately $1,040,000.
The Extended Hearing Panel found that Tweed violated FINRA Rule 2010 and Sections 17(a)(2) and (a)(3) of the Securities Act of 1933. The Panel barred Tweed from associating with any FINRA member firm in any capacity and imposed a $50,000 fine.
In the December 11, 2019 Decision, NAC reviewed Tweed’s appeal against the Hearing Panel’s findings regarding the timeliness of the disciplinary proceeding and the sanctions it imposed. The Hearing Panel had previously found the allegations above to be true and barred Tweed from associating with any FINRA member in any capacity and fined him $50,000. In this Decision, NAC affirmed the Hearing Panel’s findings of the violations and found that “Tweed poses a clear risk of future misconduct, and that the bar in all capacities is necessary to protect the investing public. In light of the bar, the $50,000 fine was dropped.
If you lost money due to broker misconduct, you may be able to recover. Call us today at 1-877-410-8172 for a free consultation. Since 1998, the experienced attorneys at Chapman LLC have been fighting for victims of investment fraud and broker misconduct.