The Financial Industry Regulatory Authority (FINRA) announced that Avenir Financial Group, a New York-based broker-dealer, its CEO Michael Clements, and registered representative Karim Ibrahim (aka Chris Allen) consented to an order halting further fraudulent sales of equity interests in the firm and promissory notes pending a hearing on fraud charges relating to the same offerings. The sales, which occurred from October 2013 to present, were often to their elderly clients. FINRA also permanently barred registered representative Cesar Rodriguez for fraud and for improperly using $77,000 of investor funds for personal expenses in a related offering.
According to FINRA, Avenir and its branch offices raised more than $730,000 in 16 issuances of equity or promissory notes, mostly to the firm's elderly clients.
FINRA charges that Avenir, Clements and Ibrahim committed fraud in the sale of promissory notes. FINRA alleges that in November 2013, Avenir and Ibrahim defrauded a 92-year-old investor by failing to disclose that Avenir was in financial trouble at the time they sold a 5 percent equity interest in the firm to him for $250,000. FINRA alleges that the document was misleading because it omitted information that a few weeks earlier Avenir offered ownership to other investors at different terms and other investors paid lower prices for their ownership interest, yet there was no basis for the changes in price. FINRA further charges that Clements aided and abetted that fraud by instructing Ibrahim regarding the sale price and offering. FINRA alleges Ibrahim was aware of the firm’s financial problems because his unfunded margin trading on behalf of another customer led to a $196,000 margin call and a request by Clements for all Avenir representatives to raise money.
If you or an elderly family member were victims of this or any other fraud due to your broker/financial advisor, call the Soreide Law Group for a no cost consultation on how to potentially recover your losses at 888-760-6552. We represent clients nationwide before FINRA.
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