The Financial Industry Regulatory Authority suspended Doran Lynn Follis of Huntington Beach, California, through March 3, 2013 for allegedly failing to conduct adequate due diligence in regards to a private placement Follis later recommended to customers. Because Follis did not perform adequate research, FINRA alleged these recommendations were improper and that Follis lacked a reasonable basis as to the placement's suitability.
In its investigation, FINRA found that from 2008 through 2009 and while employed at Cullum & Burks Securities, Inc., Follis sold a Medical Capital Holdings, Inc. MPFC VI private placement offering even though Follis should not have deemed the MPFC VI offering suitable for his customers. FINRA alleges that Follis additionally was aware that Medical Capital Holdings had previously missed interest payments and even defaulted on offerings prior to the MPFC VI.
FINRA found that after receiving his recommendations, Follis' customers invested a total of $457,000 in the MPFC VI offering.
We previously reported that fellow Cullum & Burks broker Ralph Thomas Gannett had been suspended after FINRA charged Gannett with similar claims of inadequate due diligence and unsuitable recommendations of the MPFC VI product. Gannett, of Anaheim, had sold approximately $250,000-worth of the MPFC VI.
The firm Cullum & Burks Securities, Inc. is no longer in existence, though Follis now joins Mr. Gannett as another Cullum & Burks alumni to be sanctioned by FINRA for similar alleged misconduct related to the same product. If you have invested with Cullum & Burks or in the Medical Capital offerings and believe that a lack of due diligence and/or improper recommendation has proven harmful to you or your financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.