Claims of omission, misrepresentation and wrongful use of client funds follow alleged losses totaling over $5M
Chestnut Exploration Partners and broker Mark A. Plummer were recently named in a FINRA disciplinary action that alleges omissions and material misrepresentations were made in the sale of private placement securities contracts to 88 customers, who allege that they lost over $5,000,000 after investing in the 4×4 Securities, representing an average 90 percent loss on those investments. According to the claim, Chestnut Exploration Partners and Plummer allegedly misused at least $567,000 that were put up by investors for completion and drilling costs.
Plummer spent 11 years working in the securities industry and was registered with Chestnut Exploration, which was previously known as Chestnut Energy Partners, from 2003 to 2014. Mr. Plummer is also currently the subject of two customer complaints.
Other complaints filed against Plummer include a claim that he engaged in deceptive practices, malfeasance, and fraud working with customers on investments in gas and oil interests. The customer in that complaint argues for more than $162,000 in damages. A previous complaint in 2010 about misrepresentation of material facts led to a settlement of $210,000 for a customer.
In July of 2015, FINRA initiated an investigation based on allegations from customers that Mark Plummer repeatedly made material misrepresentations and omissions to customers and wrongfully used customer funds while working for Chestnut Exploration Partners. Mr. Plummer is also facing charges of misleading FINRA by providing false testimony during an on the record interview.
When a broker is being investigated by FINRA, it is his or her responsibility to comply with requests from the agency when more information is required. If the broker declines to do this or ignores it, FINRA can move forward with other activity like suspensions or being barred from working with FINRA-registered firms.
It is also unlawful for anyone to misrepresent or omit information during the sale of a security. Brokers, investment advisors and financial planners must have a reasonable basis for the claims they make about a security and must also provide the investor with all material information known to the broker regarding the potential investment—including the fees involved and the degree of risk. Assurances or promises made without a reasonable basis and misleading information is generally considered common law fraud and may be cause for legal action.
If you or someone you know has been impacted by unethical or illegal dealings with a securities broker, it is in your best interest to get legal advice from an experienced attorney. As the victim of potential securities fraud, you may have rights that allow you to recover some of your financial losses. No investor should have to pay the price because of a broker or brokerage firm that doesn’t follow the law or take care with your investments and advice. Contact Silver Law Group to discuss what recourse you might have if you or someone you know has been defrauded by an unethical broker.