New York, NY. – The law firm of Securities Fraud Attorney Mark A. Tepper has filed claim against Mutual Service Corporation (MSC) and parent company LPL Financial for allegedly deceiving a Bronx retiree while “recommending and purchasing an interest in a fraudulent Ponzi scheme” known as IPDS.
“The scheme’s operator John Konoski was arrested, by Suffolk County police, on charges of operating a scheme to defraud together with grand larceny in excess of $1 million in connection with the Ponzi scheme,” the claim alleges.
The claim filed with the Financial Industry Regulatory Authority (FINRA), alleges that while at MSC’s small, remote, Long Island branch, the MSC broker “solicited Claimant to invest in IPDS, which he represented was a guaranteed safe investment.”
The claim contends that when questioned about the investment, the MSC broker repeatedly responded, “I will make you a millionaire in five to ten years, as long as you don’t bug me.”
The MSC broker “knew or should have known his statements to Claimant were false,” the claim alleges.
“MSC breached its duty to ‘act decisively to detect and prevent’ its registered representative’s fraudulent activity which was unsuitable, unregistered, private securities transactions – (a/k/a selling away) with its customers. As a result, MSC is liable for its registered representative’s Ponzi scheme activities even if they were unaware of them,” the claim alleges.
The practice of “selling away,” is a violation of financial industry standards and occurs when a registered representative engages in a private securities transaction without the knowledge or consent of the broker dealer.
The claim contends that prior to MSC breaching its duty to supervise its registered representative, an SEC Bulletin specifically warned broker-dealers, like MSC, with small, remote offices, of the continuing need for unannounced onsite inspections to fulfill their supervisory responsibilities.
About Mark A. Tepper, P.A. ( www.MarkTepper.com )
A former Chief Trial Counsel at the Bureau of Investor Protection and Securities, Attorney Mark Tepper has earned the reputation of “Investor Advocate” while practicing law for over 35 years and representing the individual investor. A member of the Florida, New York and California Bars, Mr. Tepper is AV®-rated, the highest rating of lawyers in the Martindale-Hubbell Law Directory.
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