Monday, December 16, 2013
World Trade Financial Corp & Frank Brickell Fined By FINRA
Stoltmann Law Offices is currently investigating World Trade Financial Corp (WFTC) of San Diego, CA and its employees Frank E. Brickell, Rodney P. Michel and Jason T. Adams. The Securities and Exchange Commission conducted an investigation into the organization's sales practices. The SEC concluded that Frank Brickell engaged in the unregistered sales of securities in violation of Section 5 of Securities Act of 1933 and NASD rule 2110. The SEC further found that WTFC and Rodney Michel failed to properly supervise Brickell while he conducted sales of unlicensed securities.
WTFC was fined $45,000 and prohibited from receiving and selling unregistered securities until the firm obtains an independent consultant to review its procedures. Rodney Michel was fined $30,000, and received a 45-day suspension from the associating with any FINRA member in a principal capacity. Jason Adams was fined $20,000, and received a 30-day suspension from the associating with any FINRA member in a principal capacity. Frank Brickell was fined $15,000, and received a 30-day suspension from associating with any FINRA member in any capacity.
During the period in question, WFTC, acting through Brickell, acted as an agent in an account of a sole proprietor unnamed customer who conducted sales of 27,809,938,908 shares of common stock at penny and sub penny prices. The sales of these stocks resulted in approximately $60,230,115 in proceeds.
During relevant time period, Brickell acted as the registered representative of record and the chief compliance officer for WFTC. The customer made loans, or acquired loans previously made by third parties, in exchange for convertible notes to purchase stock at a substantial discount, approximately 20% to 50% from the current market rate.
After this conversion of loans to stock purchases, the customer liquidated the penny and sub penny prices and withdrew the proceeds. The transactions conducted involved a large percentage of the individual stocks daily trading volume, and they also represented a large percentage of the outstanding shares of the issuers.
During the time in question, neither WTFC or Brickell conducted a searching inquiry into these companies backgrounds. The majority consisted of a little known companies with short operating histories and thinly traded stocks. WTFC and Brickell ignored red flags indicating the customer was engaging in unlawful distribution of securities, such as the fact that the customer's trading activity was limited to penny stocks, and that the customer deposited a large position of thinly traded stocks and sold their position within a short time period.
The following are examples of the unlicensed securities transactions:
-Between May 27, 2009 and May 2, 2011, the Customer sold through WTFC 5,678,088.181 shares of BizAuctions common stock. During the time period, the shares sold by the customer on a daily basis represented upwards of 80% of the total trade volume for BizAuctions.
-Between June 18, 2009 and April 29,2011, the Customer sold through WTFC mPhase technologies common stock of 571,565,477 shares. During this time, the customer transitions on a per trade basis were up to a total of 60% of the total number of shares traded daily. -Between July 1, 2009 and April 12, 2011, the Customer sold through WTFC 2,223,165,139 shares of Cord Blood America common stock, and the volume of shares sold by Customer on a daily basis though WTFC represented upwards of 68% of the total traded daily volume.
-Between September 18, 2009 and January 19, 2011, the Customer sold 226,166,884 shares of Advanced Cell Technology stock, and the volume of shares sold by the customer through WTFC on a daily basis during this period represented up to 46% of the companies total traded daily volume.
-Between August 27, 2009 and January 24, 2011, the Customer sold through WFTC 4,355,762,910 shares of Camelot Entertainment Group common stock in July 2010. The company effected a reverse consolidation, and the customer sold shares at $0.09 per share. The customer then deposited more Camelot Entertainment Group shares and then traded the Camelot Entertainment Group shares down to $0.001 in January 2011. During this time period the Customers transactions on a per trade basis were as high as 80% of the total number of Camelot Entertainment Group shares traded daily.
-Between September 29, 2010 and June 21, 2011, the Customer sold though WFTC 24,290,993 shares of Nacel Energy. During this time period, the volume of shares sold by the customer on a daily basis through WTFC represented up to 98% of the company's total daily trade volume.
For clients of Frank E. Brickell who lost money in penny stocks and sub-penny stocks and are seeking to recover these losses, we are investigating whether World Trade Financial Corp failed to adequately supervise Brickell's conduct. To learn about ALL legal options, please call us at 312.332.4200 for a no cost obligation review of your case by a lawyer
