TALLAHASSEE, Fla. – On The Florida Office of Financial Regulation's website it was announced, July 21, 2011, that The Florida Office of Financial Regulation (OFR) issued a final order on May 26, 2011, against investment adviser James Paul Birmingham (“Birmingham”) (CRD # 222511) and his Broward County companies Birmingham Investments and Birmingham Capital Advisors, LLC for multiple violations of the Florida Securities and Investor Protection Act (“Act”), Chapter 517, Florida Statutes. Under Florida law, OFR has the authority to take enforcement actions against any firm or individual found to be in violation of the Act. The registrations of both Birmingham and Birmingham Investments were revoked and fines of $117,500 were assessed against Birmingham and his two firms. The time within which Birmingham could appeal the OFR final order expired on June 27, 2011.
The OFR reports that the order found that Birmingham misled a long time family acquaintance, with limited investment experience, to invest his incapacitated mother’s assets with Birmingham. Birmingham then excessively traded the assets, resulting in substantial investor losses. Birmingham’s trading pattern was inconsistent with the client’s wishes to preserve his mother’s assets, because the client’s mother was incapacitated and relied on her investments to survive financially.
“Investors cannot be too careful with whom they entrust their hard-earned money. Once again, OFR had to take away a firm’s and individual’s registration to do business in Florida, because they took advantage of a trusting victim, with whom they had a long-time relationship,” OFR Commissioner Tom Cardwell said. “When it comes to investing their money, investors should always be aware of the potential for greed, even with purported professionals they know. Be vigilant about your investments, ask questions and be sure you know what is happening with your money and why. After all, it’s your money, not the broker’s or adviser’s money. Report anything suspicious to OFR, or the state securities regulator in your own state, if you live outside of Florida.”
According to the OFR article, Birmingham had been designated in 2005 to be the mother’s guardian by the Circuit Court for Miami-Dade County. The guardianship was to provide prudent financial management of her property, as provided to incapacitated Floridians under the law. Birmingham was granted authority to invest the mother’s money and trade the mother’s account for eight months without consulting anyone.
It was reported that the account was opened in March 2008, the mother’s assets invested with Birmingham totaled $375,000, which was most of the mother’s net worth. While Birmingham managed the account over the next year, Birmingham excessively traded the mother’s brokerage account resulting in a loss of $122,000.
OFR reports that Birmingham and his firm were found to have committed multiple violations of the Act, including:
• Securities fraud
• Excessive trading of the mother’s account
• Failing to account for all received property
• Making unsuitable recommendations
• Violating OFR’s safekeeping requirements for advisers with custody of client funds
The Florida OFR’s Division of Securities recommends that investors do their research before investing with or having an investment or securities firm or representative manage the investor’s money.
This article was obtained on Florida's OFR's website.
Securities Attorney, Lars Soreide, of Soreide Law, PLLC, has represented clients nationwide. If you or a family member have become a victim of James Paul Birmingham of Florida, Birmingham Investments, or Birmingham Capital Advisors, LLC, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses. To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
