Following several years of what it alleged to be fraud, FINRA filed a cease and desist order against Avenir Financial Group, naming Avenir CEO Michael Todd Clements and broker Karim Ahmed Ibrahim (aka Chris Allen) as subjects of an expedited complaint alleging fraudulent sales of equity or promissory notes to elderly customers of the firm, generating over $730,000 in proceeds for the firm.
FINRA also barred broker Cesar Omar Rodriguez for alleged fraudulent activity, including improper use of customer funds in which Rodriguez purportedly used $77,000 of investor funds for personal expenses.
According to the complaint, Avenir, beginning in October 2013, raised $338,000 from four customers in several self-offerings whose prices "inexplicably" increased drastically. For instance, while a first offering's one percent share cost investors $2,600, by the third offering, this same one percent share cost $50,000.
Investigators also pointed out that at the time Avenir sold these purportedly skyrocketing shares, the Avenir Financial Group itself had been suspended from operating a securities business due to insufficient capital, and during the third offering, faced a $196,000 margin call.
FINRA found that Avenir sold to several elderly investors, pointing to the case of one 92-year-old customer who invested $250,000 for a third-offering five-percent equity interest (which, according to FINRA's numbers, would have cost just $13,000 during the first offering), while Clements and/or Ibrahim falsely represented how the funds would be used, materially omitted or failed to disclose the firm's financial difficulties, and "willfully" violated the Securities Exchange Act as well as FINRA rules.
These misrepresentations and omissions allegedly misled the elderly client regarding the facts that he overpaid for his shares compared to earlier investors and that Avenir faced a financial crisis that greatly affected how his $250,000 investment would be spent (e.g., to fill the $196,000 margin call).
Beginning in 2014, Avenir raised $173,800 from promissory notes and equity sales in Bull Run Capital Holdings, LLC (or "BRCH"), which FINRA claims were partially used to pay the personal expenses of Avenir representative Rodriguez unrelated to BRCH business. FINRA specifically charged Clements with aiding and abetting this fraud by advising Rodriguez that personal use of investor funds was acceptable.
Documents indicate Rodriguez improperly used $77,000 of investor funds for jewelry, shoes, toys and other personal expenses.
If you have invested with Avenir Financial Group, its CEO Michael Todd Clements or brokers Karim Ahmed Ibrahim/Chris Allen or Cesar Rodriguez, or with any other financial professional whose omissions or misrepresentations or material facts, fraudulent use of investor funds for personal reasons, or other activity has 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.