oreide Law Group obtained the following information on FINRA’s March of 2019, Disciplinary Report, which is available to the public on FINRA’s website. The following is a summary of the report:
The OHO (Office of Hearing Officers) issued the following decision, which has been appealed to or called for review by the NAC (National Adjudicatory Council) as of January 31, 2019. The NAC may increase, decrease, modify or reverse the findings and sanctions imposed in the decision. Initial decisions where the time for appeal has not yet expired will be reported in future
Eric Steven Smith (Eric Smith) (CRD #2894648, Waterford, Michigan) appealed an OHO decision to the NAC. Smith was barred from association by FINRA and ordered to pay $130,000, plus interest, jointly and severally with his member firm, in restitution to clients.
The sanctions were based on the findings alleging that Eric Steven Smith knowingly or recklessly misrepresented and omitted to disclose material facts in connection with the sales of securities.
FINRA’s findings stated that Eric Smith allegedly defrauded investors by offering and selling securities through a bridge loan offering designed to raise funds to satisfy pressing financial obligations for his firm’s parent company.
Eric Steven Smith, who was the chairman, chief executive officer (CEO), and owner of the firm’s parent company, allegedly created and circulated offering documents to prospective investors containing omissions and misrepresentations of material facts, while being fully aware of the parent company’s precarious financial condition.
According to the report, Smith fraudulently failed to disclose in the bridge loan offering documents that the parent company owed but could not pay principal due to the principal owed to investors in a prior bond and bridge loan offering. Eric Steven Smith allegedly misled prospective investors to believe that the parent company was about to receive large cash infusions from an existing consulting agreement with a special purpose bank, despite knowing that there was no agreement and that the special purpose bank had not been formed.
Allegedly, Smith also made misrepresentations that the parent company had established a relationship with a national trust company to become the investment advisor of its funds and that it had a pending engagement with the City of Jacksonville, Florida, that would generate substantial revenue, while knowing that no such agreements were nearing completion.
FINRA’s findings also stated that Smith engaged in unethical conduct by obtaining money from the public for four different investments and the bridge loan note offering by means of material misrepresentations and omissions of fact regarding those investments. Smith solicited participation in the bridge loan note offering and raised a total of $130,000.
According to the allegations, Eric Steven Smith was persistent in soliciting investors to purchase the bridge loan notes even after he had no doubt that the consulting agreement with the special purpose bank was a sham and knew there were no prospects of large scale profits from consulting agreements.
FINRA’s findings stated that Smith actively engaged in the conduct of his firm’s securities business as a registered representative and a registered principal without being registered. Eric Steven Smith, acting in the capacity of a representative, solicited his firm’s clients, personally and through its brokers, to invest in a series of bonds and notes, asked representatives to find interested investors among their clients, and then personally met with them to solicit their investments. Acting in the capacity of principal, Smith involved himself in the management of his firm.
The sanctions are not in effect pending review. (FINRA Case #2015043646501)
Eric Smith is currently registered with the following firm, and has been there since 4/27/2010:
TRUSTEE EMPOWERMENT & PROTECTION, INC.
755 W. BIG BEAVER
TROY, MI 48084
If you’ve experienced investment losses due to the actions or recommendations of Eric Steven Smith of Trustee Empowerment & Protection, Inc. of Troy MI, contact Soreide Law Group and speak at no cost to a securities lawyer regarding the possible recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group will represent you nationwide before FINRA on a contingency fee basis—no fee to you if no recovery.