Dennis Hayes Subject of FINRA Complaint Alleging Selling Away Activities in which Customers Lost $2.3 MillionFriday, February 8, 2019
On January 11, 2019, the Financial Industry Regulatory Authority (FINRA) Department of Enforcement filed a Complaint against Dennis Hayes, a registered representative most recently associated Salomon Whitney Financial in Melville, New York.
According to his FINRA BrokerCheck report, Hayes was associated with Newbridge Securities Corporation (Newbridge) in Boca Raton, Florida from February 2010 to September 2016. Hayes was permitted to resign after the firm “opened [an] internal review regarding a customer complaint that evolved into arbitration for possible selling away and private securities transactions.” Newbridge also claims that he was permitted to resign for making little to no production within the 12 months prior to his resignation. Hayes then very briefly worked for Salomon Whitney Financial in Mellville, New York from April 25, 2017 to April 27, 2017 when he voluntarily resigned. Hayes has been associated with eight total firms since obtaining his registration as a General Securities Representative in 2001.
According to the FINRA Complaint, Hayes allegedly recommended that nine investors, eight who were Newbridge customers, invest $2.7 million in five companies and facilitated those investments between March 2010 and June 2016. The securities were promissory notes held by MSLLC and IRLLC, common stock and promissory notes of BTInc and KIInc, a successor of BTInc, and common stock of FXInc. Not only did Hayes personally invest in the companies, but the companies paid a combined total of approximately $130,000 to him in a six month period in 2012 and BTInc employed Hayes to perform accounting work starting in 2010. Hayes allegedly facilitated the transactions by preparing investment checks and subscription agreements for the investors and receiving quarterly statements and regular email correspondence from the companies to be forwarded on to his customers. After one company filed for bankruptcy and the other companies ceased operations, Hayes’ customers lost at least $2.3 million.
FINRA also alleges that Hayes used two personal email addresses to communicate with four of these customers about their Newbridge accounts and communicated through text messaging with another customer. FINRA alleges that Hayes did not provide the communications to the firm so that Newbridge could review or retain the correspondence for its records, nor did he provide written or any other notification to Newbridge regarding his participation in these private securities transactions. Based on the foregoing, Hayes violated NASD Conduct Rule 3040 and 3110(a) and FINRA Rules 3280, 4511, and 2010.
FINRA further alleges that between April 2017 and January 2018, Hayes failed to provide requested documents and information pursuant to FINRA Rule 8210. Thus, Hayes also violated FINRA Rules 8210 and 2010.
FINRA Department of Enforcement is requesting relief to make findings of fact and conclusion of law that Dennis Hayes committed the alleged violations and order that appropriate sanctions be imposed, including disgorgement of ill-gotten gains or full restitution.
Many times, brokerage firms can be held liable if they failed to supervise a broker who committed misconduct while registered at their firm. If you lost money due to Dennis Hayes’ alleged selling away, you may be able to recover from him or his associated brokerage firm, Newbridge Securities Corporation. Call us (1-877-410-8172) for a free, no obligation consultation. Since 1998 we have been fighting for victims of broker misconduct and investment fraud.