Former San Diego Registered Representative Named in FINRA Complaint for Converting Customer Funds and Failing to Notify Member Firm of Private Securities TransactionsWednesday, November 6, 2019
On October 1, 2019, the Financial Industry Regulatory Authority (FINRA) Department of Enforcement filed a complaint against Martin Batstone, a former registered representative associated with Independent Financial Group, LLC (IFG) in San Diego, California, for allegations of soliciting investments to two customers and then transferring the funds to his personal bank account to use for his own expenditures.
According to his FINRA BrokerCheck report, Batstone has been associated with several member firms in recent years including Ameriprise Financial Services, Inc. (August 1992 – January 2007), QA3 Financial Corp. (January 2007 to January 2009), Independent Financial Group, LLC (January 2009 – April 2007), Crown Capital Securities, L.P. (April 2017 to August 2018) and Newbridge Securities Corporation (November 2018 to May 2019), all which are located in San Diego, California.
In 2014, Batstone was introduced to a small LLC owned by a former rapper and disc jockey that purportedly provided brand management and product placement services for athletes and entertainers. For the next five years, Batstone assisted the company with marketing, capital raising, and managing at least two of its financial accounts. During this time period, the company had one client: a skateboarder and TV personality who only requested that the company brand and distribute an energy drink he promoted.
Between November 2015 and August 2016, he solicited investments to his brokerage clients. He allegedly told investors that their funds would be used for general operating costs and marketing and distribution of the company’s sole client’s energy drink. Batstone claimed that the investors could expect returns on their investments in five to seven years.
FINRA alleges in the complaint that between November 2015 and January 2017, Batstone transferred a total of $11,000 of the funds intended to be invested in this company to his personal bank account without their knowledge or authorization. As a result, FINRA claims Batstone willfully violated Section 10(b) of the Securities Exchange Act and FINRA Rules 2150, 2020 and 2010 for converting customer funds. He also violated FINRA Rules 3280 and 2010 for failing to provide written notice to IFG of his participation in soliciting investments that constitute private securities transactions. To date, the investors have received no return on their investment, or return of their principal investments in the company.
FINRA Department of Enforcement is requesting relief to make findings of fact and conclusions of law that Martin Batstone committed the violations alleged in the complaint and order that sanctions and fines be imposed under FINRA Rule 8310(a) and 8330.
Oftentimes brokerage firms can be held liable for the brokers’ misconduct if they failed to supervise them while registered at the firm. If you lost money due to conversion or solicitation of a bad investments through Martin Batstone, you may be able to recover from him or Independent Financial Group, LLC, the brokerage firm where he was registered. Since 1998, the experienced attorneys at ChapmanAlbin LLC have been fighting for victims of investment fraud and broker misconduct. Call us today at 1-877-410-8172 for a free consultation.