The Financial Industry and Regulatory Authority (FINRA) fined Freedom Investors Corp. $30,000, censuring the firm for improper policies and systems that resulted in penny stock recommendations that were unsuitable based on the Freedom customers' financial circumstances.
Additionally, registered principals Joel Reid Blumenshein and Gary Lee Gossett were fined and suspended for their roles in the Freedom violations.
Gossett was fined $5,000 and suspended from the industry for 18 months after FINRA found he had engaged in misconduct by soliciting penny stock transactions to unfit customers. Gossett furthermore falsely recorded the orders as unsolicited, resulting in inaccurate records and bookkeeping.
Blumenshein supervised both Gossett and the firm's Chief Compliance Officer (CCO), yet according to FINRA, Blumenshein failed to perform supervisory functions required by industry regulations. Specifically, Blumenshein authorized a CCO's agreement with a customer, though he had definitive knowledge that FINRA objected to the document.
Blumenshein also failed to review Gossett's activities and dealings with customers, this lack of supervision resulting in the furtherance of Gossett's risky trading activity. For his misconduct, Blumenshein was suspended from the industry for three months.
In a separate case, Blumenshein failed to maintain timely correspondence with FINRA after entering into a settlement with a customer exceeding $15,000.
If you have had any dealing with Joel Reid Blumenshein, Gary Lee Gossett or their firm Freedom Investors Corp., and suspect that lack of supervision and/or improper recommendations, penny stock or otherwise, has been harmful to you or your interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.