FINRA settled with former Liberty Partners Financial Services, LLC (Bakersfield, California) broker Ronald Paul Rafaloff and barred him from the securities industry for converting an elderly client's funds for personal use and subsequently lying to both Liberty Partners and FINRA during the investigation.
The findings state that in 2011 and 2012, Rafaloff discussed investing in three companies with a 74-year-old retiree client. Rafaloff allegedly promised "exorbitant returns" in the three speculative businesses—PVT Consulting LLC, Merchant Capital and Credit LLC, and Factoring Resources LLC—while failing to disclose that he had founded and/or served as an executive at each of these three companies and had authority to access funds in the companies' bank accounts.
According to the investigation, Rafaloff's client invested $405,000 of her retirement savings in the companies, believing that her funds were being deposited pursuant to her investment objectives, which included a conservative risk tolerance. The report states that Rafaloff's elderly client otherwise relied on bonds, certificates of deposit, pension plan and Social Security payments for income and had a total net worth of between $1 and $3 million.
Investigators found evidence of Rafaloff's improper conversion of customer funds by tracing debit card charges, including purchases at Men's Wearhouse, Best Buy, Apple Store, AT&T, Target, Foot Locker and Sports Authority, all of which were effected without the client's permission or authorization.
In addition to disciplining Rafaloff for the illicit conversion of customer funds and for lying to investigators, FINRA found that Rafaloff violated industry rules by guaranteeing against losses—he issued six written guarantees over the two year period—and by failing to tell Liberty Partners about the private securities transactions and outside business activities.
According to firm documents, when Liberty Partners discharged Rafaloff for selling away, Rafaloff admitted to the misconduct.
If you have invested with Ronald Rafaloff, Liberty Partners, or in Rafaloff's companies PVT Consulting, Merchant Capital and Credit or Factoring Resources, and have been harmed financially by inaccurate guarantees against losses, misappropriation or conversion of funds, or by other false and misleading information causing investments to be at odds with your objectives and risk tolerance, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.