FINRA Takes Action Against Cantone Research

Allegations include misrepresentation in sales of $8 million of promissory notes

On Friday, November 20, 2015, FINRA filed a complaint against Cantone Research and its president Anthony J. Cantone. The action against Cantone is for fraud in relation to the execution of promissory notes on behalf of Christopher Brogdon, who is currently being charged by the SEC for fraud, multiple SEC violations, commingling and misappropriation of funds.

According to FINRA, Cantone sold more than $8 million of COP in five promissory notes and all but one of the notes have already defaulted with losses estimated at $6 million—while Cantone and his firm, Cantone Research, collected more than $1 million in payments for fees and commissions.

Cantone issued the notes under the terms that Brodgon would use the investors’ funds to purchase and/or develop a senior living facility or one of his other real-estate properties. But Cantone and his firm neglected to inform investors of Brogdon’s shady past, including the fact that he had been expelled from the securities industry not once, but twice. Investors were also left in the dark about the fact that Brogdon had been indicted for racketeering, theft and Medicaid fraud, that he had been found liable for breaching a stock repurchase guarantee agreement and that he had been involved in financial misconduct.

FINRA further alleges that both Cantone and his firm not only withheld this information about Brogdon, they concealed his defaults on payments and secretly covered the payments for him and continued seeking new investors without disclosure even after the defaults.
Cantone and his firm face formal charges from FINRA for these allegations and the firm’s Chief Compliance Officer, Christine Cantone, is also being charged with failing to supervise Cantone while the fraudulent misconduct was taking place.

Investors can get more information about this disciplinary action or about any FINRA registered broker brokerage by using FINRA’s BrokerCheck, which is a complimentary service. If you have any issues with Cantone or believe that your broker has been involved in any misconduct as it relates to your relationship with him/her, it’s advisable that you seek the services of an experienced securities attorney.

The attorneys at Silver Law Group are industry leaders in the field of FINRA and securities arbitration, representing individual and institutional investors nationwide who have lost money at the hands of trusted financial advisors. Our services are on a contingency-fee basis, which means we are only compensated if there is a recovery of losses. For more information, contact us for a complimentary consultation.