Securities Arbitration Lawyers BlogFINRA Suspends Broker Michael Knittel After Private Security Transaction
Michael Knittel (Michael Murray Knittel CRD# 3274235) is a currently registered broker and investment advisor whose last known employer is Fortune Financial Services, Inc. (CRD#:42150) of El Dorado Hills, CA. His previous employers include J.W. Cole Financial, Inc. (CRD#:124583) and Financial Advisers Of America, LLC (CRD#:142170), both of Folsom, CA, and RBC Capital Markets, LLC (CRD#:31194), also of El Dorado Hills. He has been in the industry since 1999.
Knittel engaged in a private security transaction which was specifically prohibited by his firm, Fortune Financial Services. The transaction involved recommending an investment in a promissory note to four individuals who were not customers of FFS. The note was issued by an LLC to fund remodeling a residential property and to pay an existing lien on that property. When the remodeling was completed and the property sold, the investors would be repaid their principal investment and receive a portion of the profits from the eventual sale.
After the investors were introduced to one of the LLC owners and the transaction completed, Knittel received a payment of $10,000 from the LLC.
Knittel never provided FFS with written notification of his involvement in the transaction, nor did he receive any written notice from the firm.
In October of 2018, the four investors complained to Knittel about their investment. Knittel sent the $10,000 he received from the transaction to the investors. They initiated a civil action against Knittel on 6/1/2020, alleging “Fraud, Negligence, Breach of Contract, Conspiracy.” This action is currently pending.
FINRA began its investigation following the receipt of an amendment of the Uniform Application for Securities Industry Registration or Transfer (Form U4) from Fortune Financial Services. In it, the firm stated that Knittel was involved in a pending civil action related to an investment.
Knittel neither admits nor denies the allegations levied by FINRA om the Letter of Acceptance, Waiver & Acceptance (AWC). He agreed to the sanctions, which included a fine of $10,000 and a four-month suspension in all capacities that ends on 06/06/2022.
Did You Invest With Michael Knittel?
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