FINRA barred former CUSO Financial Services, L.P. broker Patrick Richard Harrison for engaging in a series of private securities transactions outside of the scope of his employment with CUSO and, as a result, seeing his two affected investors lose over $340,000 of their own money.
According to the findings, Harrison violated CUSO firm policy and FINRA/NASD rules by not just failing to inform his firm of his outside private securities transaction activity, but by making material misstatements to and omitting material facts from investors in connection with those transactions.
The investigation states that Harrison introduced two elderly investors to a third party, who, with Harrison's assistance, orchestrated a series of discounted-shares transactions. Harrison then received $14,000 from the third party, although the third party purportedly failed to deliver a single share to the senior investors, resulting in $340,000 in losses.
FINRA concluded that Harrison made material misstatements by claiming that the elderly investors could make a "quick profit" on the discounted shares, and that Harrison missed several red flags that would have suggested the discounted shares opportunity was not genuine.
For instance, regulators believe that Harrison should have identified that the third party's repeated requests that the elderly clients pay large additional amounts for "registration and other fees" was a red flag that the opportunity was not legitimate.
Because of his failure to adequately respond to these red flags, according to FINRA, the elderly clients were put in a position of risk that ultimately cost them $340,000.
If you have invested with Patrick Richard Harrison, CUSO Financial Services or with any broker, representative, financial adviser or firm whose solicitation or facilitation of third-party investment activity outside the scope of his/her employment or whose misrepresentations and omissions of material facts have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.