FINRA recently filed a complaint against Jaime Andres Diaz, a registered representative of securities broker-dealer firm National Securities Corporation from July 2007 to December 2011.
In 2012, Diaz was suspended from FINRA after failing to respond to requests for information.
FINRA alleges that between December 2009 and November 2011, Diaz took approximately $850,000 from four of his clients (one of whom was elderly), and an additional $50,000 from a representative who worked at his firm.
Diaz told his clients that their money would be used to invest in New York City real estate and restaurants, but he instead used the funds for personal use and to pay earlier investors.
Diaz is also accused of “selling away” from his member firm because he participated in private securities transactions without informing the firm, violating FINRA rules.
FINRA alleges that Diaz knowingly defrauded his clients and acted manipulatively, and that he made improper use of his clients’ funds. He also failed to respond to multiple requests for information, further violating FINRA rules, and filled out his firm’s semi-annual compliance questionnaire with false answers.
National Securities Corporation had a duty to enforce a supervision system reasonably calculated to ensure that its registered representatives were acting in compliance with applicable laws and regulations. It appears that National Securities Corporation failed in this respect and it is possible that victims of Diaz may recover losses by pursuing claims against National Securities Corporation for its failure to adequately supervise Diaz.
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