Scottsdale Capital Advisors Awaiting FINRA Disciplinary Action After Alleged Scheme

The company’s Chief Compliance Officer and President may be implicated in the case

Scottsdale Capital Advisors, an Arizona brokerage firm established in 2001, is pending disciplinary action by FINRA after allegations of inappropriate business conduct by a client, the firm’s compliance officer and the then-president of the firm.

In May, FINRA filed a complaint against the firm as well as individuals John Hurry, Timothy DiBlasi and Mike Cruz in regards to allegations that these individuals and the firm violated FINRA rules by being involved in the sale of more than 74 million unregistered shares of three separate stocks, resulting in proceeds of more than $1.7 million for the customer and $170,000 in commissions for the firm, according to FINRA.

Hurry, an investor who established a broker-dealer entity in the Cayman Islands in 2013, allegedly took advantage of Cayman Islands law to be exempt from certain regulations and appointed someone else as the entity’s director, allegedly to avoid the appearance that Hurry himself controlled the entity, according to FINRA reports.

Cruz and DiBlasi have been registered with the firm since 2008 and 2012 respectively, and FINRA is implicating them in the case due to their responsibilities for enforcing supervisory procedures to prevent fraud and illicit activity, according to the report.

The firm was also in trouble with FINRA in 2012 for allegedly violating FINRA rules by not taking the appropriate measures to prevent a public relations firm from using one of its associates name and/or CRD number in press releases recommending specific securities to the public. Some of the releases stated that the individual was a registered person employed by the public relations firm when he was not. The firm did not admit or deny the findings, according to FINRA, but consented to a censure and fine of $7,500.

In 2011, the firm was censured, suspended for 40 days and fined $125,000 by FINRA after an alleged failure to comply with its anti-money laundering precautions in regards to unregistered stocks in an effort to catch “red flags” and prevent any potential illegal activity under its nose. In 2009, FINRA filed a claim alleging that the firm bought corporate bonds from customers at unfair prices, leading to a censure and fine of $7,500.

Securities fraud is a deceptive practice in the stock and commodities markets where brokers have investors make purchasing decisions based on false or incomplete information, which is in violation of securities laws. This deception frequently results in severe losses for investors. But investors do have rights and may be able to recover their losses through securities arbitration.

If you’ve been defrauded by Scottsdale Capital Advisors or any broker, discuss your rights to loss recovery with an experienced securities attorney — contact Silver Law Group today. Our attorneys work nationwide, offering free consultations and cases handled on a contingent fee basis, which means you pay no legal fees unless we win your case.