Allegations include sales of millions of unregistered stock shares
John Hurry, a broker investment adviser who has been in the securities industry for 20 years, is pending disciplinary review by FINRA following allegations of his involvement with the illicit sale of more than 74 million unregistered shares through Arizona-based firm Scottsdale Capital Advisors.
In May, FINRA filed a complaint against the firm, Hurry and two of the firm’s higher-ups in regards to allegations that the individuals and the firm violated FINRA rules by selling 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.
Securities like stocks, bonds and notes must be registered with the Securities and Exchange Commission (SEC) before they can be sold to the public. Any stock without an effective registration statement on file with the SEC is considered unregistered, and any attempts to sell these financial securities before they are properly registered may be a violation of the federal securities law.
Hurry, who has been a director of Scottsdale Capital Advisors since 2002 and works closely with its finances, according to the FINRA report, established a broker-dealer entity (“CSCT”) in the Cayman Islands in 2013 and allegedly took advantage of Cayman Islands law to be exempt from certain regulations. Hurry appointed someone else as the entity’s director, allegedly to avoid the appearance that Hurry himself controlled the entity. Hurry is also listed as a director for Scottsdale’s clearing firm, Alpine Securities Corporation, which he has been associated with since 2013.
FINRA alleged that the person Hurry put in charge of CSCT was inexperienced and could not have been expected to execute the duties required of him, existing simply to create the illusion that Hurry did not possess sole control over CSCT. FINRA also stated that Hurry was essentially the person in control of the entire company, having the ability to hire and fire employees, meet with customers and request daily updates and correspondence with the firm.
According to FINRA, Hurry’s involvement with Scottsdale, Alpine and his own firm, CSCT should have made him subject to scrutiny, but that fact was allegedly overlooked by Scottsdale and its president and chief compliance officer during the time that the illicit trading occurred.
If you’re an investor who suffered financial losses at the hands of John Hurry or any other financial advisor’s misconduct, you may be eligible to recover your losses through securities arbitration. Silver Law Group’s securities fraud attorneys have proven experience recovering investors’ lost funds. Contact us today for a free consultation where we’ll discuss your rights and case.