“Another schlocky broker-dealer gets hit with an arbitration award and the owner and everyone else declare bankruptcy,” Mr. Silver told Investment News. Mr. Silver is also representing another client whose account was churned by the same firm.
The firm in question is E1 Asset Management (CRD# 46872) of Jersey City, NJ. In the arbitration, the client requested $4 million in damages. Three FINRA arbitrators awarded the client compensatory damages of $1.6 million, interest of $578,000, and legal fees of $420,000, for a total of $2,598,000.
But the client may never see a dime of this award. Despite allegations of securities fraud, common-law fraud, negligence, unsuitability, and various breaches, two of the brokers involved have filed for Chapter 7 bankruptcy. This means that neither one is now personally responsible for paying the arbitration award.
Ron Yehuda Itin (CRD# 2344151) is the president, owner, and CEO of E1 Asset Management. He is still registered with the firm. Broker Shaun Joseph Grimaldi (CRD# 4529021) officially left E1 Asset Management on May 8, 2024, and is now registered with J.H. Darbie & Co., Inc. (CRD# 43520) of New York, NY. Both filed for Chapter 7 bankruptcy on May 2, 2024.
Itin and Grimaldi have multiple disclosures in their CRD files, including the recent bankruptcy filing. Itin’s record goes back to 1993, when he started in the industry, and his first disclosure occurred in 1996. Since then, Itin now has 16 disclosures, including two FINRA disciplinary actions, a tax lien, and a previous bankruptcy entry that was discharged in 2015.
Grimaldi, who began in the industry in 2002, has just six disclosures, five of which are customer disputes including the FINRA decision on May 9, but stayed because of the bankruptcy filing. FINRA often suspends brokers who fail to pay arbitration awards and settlements, making it more difficult to collect.
As for E1 Asset Management, its most recent audited financial statement filed with the SEC showed a $78,000 loss in 2022, on revenues of $691,000. The firm itself has six disclosures of its own dating back to 2011.
Firms of this size are often unable to pay these awards, especially when the brokers declare bankruptcy. Many of these smaller and undercapitalized broker dealers also handle risky and speculative “alternative” investments, which are frequently expensive.
Did You Invest With E1 Asset Management?
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide 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 contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.