David Volpe Discharged From Firms For Improper Private Transactions & Borrowing From Customers
According to Volpe’s BrokerCheck Report, published by the Financial Industry Regulatory Authority (FINRA), Volpe has been discharged from two different brokerage firms:
- In December 2018, Volpe was discharged from LPL for an alleged “violation of the Firm’s private securities transactions policy for involvement in capital-raising efforts without prior disclosure.”
- Similarly, in April 2019, Volpe was discharged from First Financial for an alleged “failure to notify firm of private securities transaction involvement and violation of firm policy regarding borrowing funds from a client.”
Following these discharges, Volpe was investigated FINRA. According to FINRA’s Letter of Acceptance, Waiver and Consent, Volpe failed to respond to FINRA’s request for information and documents, resulting in “a bar from associating with any FINRA member firm in any capacity.”
At least one customer has filed a securities arbitration claim alleging that “between 2015 and April 2019, [Volpe] converted her funds by liquidating her accounts for his own personal use and by requesting [claimant] to write personal checks to him.” That investor’s case—filed in August 2020—is still pending.
Brokers May Be Liable For Improperly Borrowing Money From Customers
One way brokers are able to misappropriate client funds is by convincing customers to lend them money. Brokers sometimes take advantage of the trusting relationship they develop with customers and convince them to lend the broker money, without the intent to ever repay the loans. Sometimes the broker says the money is fore personal use, sometimes the broker says it is for investment purposes.
Regardless, FINRA rules prohibit brokers from borrowing money from customers unless permitted by the firm and specific written firm procedures are followed. These rules are designed to protect investors—particularly those who are elderly or vulnerable—from being taken advantage of.
Private Securities Transactions—Or “Selling Away”
Some brokers improperly obtain their customers’ money by “recommending” unregistered private investments. This form of fraud is often referred to in the industry as selling away. This is when a broker recommends an investment that was never registered or approved by the broker’s employing firm, which is concealed from the customer. These unapproved “investments” are often illegitimate or entirely fake business ventures and/or Ponzi schemes.
Brokerage firms have an obligation to supervise their representatives in order to prevent these types of schemes. This includes taking steps and enacting protocols to ensure that representatives follow securities rules and regulations as well as internal policies and procedures. Failure to uphold these standards could render the brokerage firm liable for the losses suffered by customers.
Did You Invest With David Volpe?
Silver Law Group represents investors in securities and investment fraud cases nationwide. Our lawyers represent investors to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingency fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.