The Financial Industry Regulatory Authority has fined and suspended a former Cetera Advisors broker for engaging in private securities transactions involving Woodbridge Group of Companies LLC, which was operating a $1.3 billion Ponzi scheme.
Cetera’s written supervisory procedures prohibit registered representatives from engaging in private securities transactions without approval, and Owens never sought or received approval from Cetera to sell the notes, the regulators claim.
According to a FINRA letter of acceptance, waiver and consent, Roger Owens, solicited investors to purchase Woodbridge promissory notes and sold $1.7 million to 14 investors, four of whom were Cetera customers.
Owens, who was affiliated with Cetera for 11 years, received $59,471 in commissions in connection with the transactions, and personally invested $75,000 in Woodbridge notes.
He was terminated from the broker-dealer in April 2019 for violating its policies and procedures by participating in unapproved private securities transactions.
In addition, FINRA claims that Owens falsely attested in his 2016, 2017, and 2018 compliance questionnaires that he had not engaged in any private securities transactions without receiving prior written approval from Cetera.
Without admitting or denying the findings, Owens agreed to a $10,000 fine, a one-year suspension, and to disgorge $59,471 in commissions, plus interest.
Robert Shapiro, who formerly served as chief executive officer of Woodbridge, recently pleaded guilty to conspiracy and tax evasion in Miami. Under his leadership, the company perpetrated a $1.3 billion Ponzi scheme from July 2012 until December 2017, when it went bankrupt.
Shapiro faces up to 25 years in prison when he is sentenced on October 15. Last November, he agreed to pay $120 million to resolve civil claims related to the scheme brought by the Securities and Exchange Commission. The SEC has previously charged numerous Woodbridge sales agents for various registration violations.
Losses to the more than 7,000 Woodbridge investors are expected to exceed $100 million.