According to December of 2020 FINRA Disciplinary Report, on October 19, 2020, Eric Steven Smith (CRD #2894648, Troy, Michigan) appealed a National Adjudicatory Council (NAC) decision to the SEC. Eric Steven Smith was barred from association with any FINRA member in all capacities and ordered to pay $130,000, plus prejudgment interest, jointly and severally with his member firm, in restitution to investors. In light of the bar, additional sanctions were assessed but were not imposed. Smith is listed with TRUSTEE EMPOWERMENT & PROTECTION, INC. of Troy, Michigan.
The NAC affirmed the findings and affirmed in relevant part the sanctions imposed by the Office of Hearing Officers (OHO). The sanctions were based on the findings that Eric Steven Smith allegedly willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 and violated FINRA Rule 2020 by allegedly fraudulently misrepresenting and omitting material facts in connection with the sale of securities.
These findings stated that Eric Steven Smith allegedly engaged in acts of fraud over an extended period involving investors who lost the entirety of their investments. Smith allegedly solicited a minimum of 15 people to invest in a bridge loan note offering of which four people invested $130,000 in the offering.
According to the FINRA report, allegedly Eric Steven Smith intentionally failed to disclose the critical fact that his member firm owed prior investors hundreds of thousands of dollars that it could not repay. FINRA alleges that Smith was desperate to raise funds for the firm, which was also struggling to pay its employees and remain viable. FINRA also alleged that Smith knew or was reckless in not knowing that his representations about the firm’s financial prospects were unfounded and would persuade investors to purchase the offering.
FINRA states that allegedly Eric Steven Smith continued to solicit investors when it was obvious that his claims in the offering materials regarding a special purpose bank and the purportedly pending engagements with a trust company and the city of Jacksonville, Florida, were false. FINRA alleged Smith’s fraudulent omission and misrepresentations resulted not only in the potential for monetary gain, but $130,000 in actual gain for Smith and the firm for his sales to the investors.
FINRA’s findings also alleged that Eric Steven Smith actively engaged in a multitude of activities as a principal and representative despite his lack of registration. FINRA alleges Smith knew that he was required to register as a principal in order to manage the firm’s day-to-day securities business. Smith allegedly also acted as a representative without oversight when he directly, and through other firm representatives, solicited firm customers to invest in the firm’s debt offerings. These solicitations resulted in some firm customers investing in firm offerings and provided the firm with much-needed cash infusions. The FINRA report stated that Smith had the potential for monetary gain from these investments that served to keep his business afloat. The bar remains in effect pending review. (FINRA Case #2015043646501)
According to the SEC’s website, Eric Steven Smith has been in the securities industry for 10 years and was listed with one firm. Smith has two disclosures on his CRD report, both are regulatory disclosures. He has been listed with the following firm since 4/27/2010:
TRUSTEE EMPOWERMENT & PROTECTION, INC.
755 W. BIG BEAVER SUITE 150
TROY, MI 48084
If you’ve suffered losses due to the actions or recommendations of financial advisor, Eric Steven Smith of Troy, Michigan, contact Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group works on a contingency fee basis and represents clients nationwide before FINRA.