FINRA barred former WFG Investments, Inc. broker Stuart Graham Dickinson for failing to conduct adequate due diligence on exchange-traded funds (ETFs) and a private placement securities offering, which turned out to be a fraudulent Ponzi scheme, and for recommending the product to several customers without having a reasonable basis to do so. OHO also ordered Dickinson to pay $924,000 in restitution to six customers who lost their entire investments in the purchase of the fraudulent ATM Alliance, LP ("ATMA") limited partnership interests.
The findings state that Dickinson (CRD #1047824) sold securities without having reasonable grounds that the investment was suitable for any investor. The report indicates Dickinson failed to conduct an adequate and reasonable investigation of ATM Alliance, and that, had he performed satisfactory due diligence, he would have recognized red flags to indicate the fraud before him and his customers.
The report states that Dickinson first came across the ATM investment through a golf-related acquaintance, and petitioned WFG Compliance Officer in charge of alternative investments Trent Whitford Schneiter to create ATMA at WFG Investments, which Schneiter approved and/or supervised, while becoming a 5% owner to Dickinson's 90% ownership stake. The report states Schneiter settled the claims against him in a separate FINRA proceeding.
Schneiter (CRD #3175324)'s BrokerCheck report indicates that, having served a suspension and paid a fine, he is presently associated with Axiom Capital Management of Austin, Texas.
Having received Schneiter and WFG's approval, Dickinson began selling interests in ATMA as private securities transactions and told investors that ATMA was to purchase ATMs and contract with ATM Financial Services to finance and manage the ATMs at various locations, which would generate revenue that, at least in part, would go to investors.
Investigators wrote, however, that Dickinson failed to perform adequate and reasonable due diligence that would have uncovered multiple red flags, such as a series of handwritten ATM retail space lease agreements, Offering Memorandum that required a minimum five-year term for ATM retail lease agreements even though multiple lease agreements had lease terms shorter than five years, Offering Memorandum that required a six-month verifiable performance history for the ATMs whose performance history was stale or otherwise failed to meet the six-month benchmark, Offering Memorandum that required a minimum of 400 monthly transactions compared to a reality in which 10 of the 45 ATMs purchased averaged fewer than 400 monthly transactions, inconsistent and overstated reporting on ATM performance history documents, and ATM surcharges that were handwritten and inconsistent between processing report and lease agreements.
FINRA surmised Dickinson ultimately failed to recognize ATMA was a fraudulent enterprise and not suitable for any investor.
Dickinson's BrokerCheck report indicates two additional settled customer disputes totaling $165,000 over complaints that Dickinson sold unsuitable investments, engaged in fraud, misrepresentation, and lack of supervision. The FINRA order regarding ATMA barred Dickinson from the industry while requiring him to pay $924,000 in restitution to certain customers.
If you have invested with former WFG Investments broker Stuart Graham Dickinson, his former supervisor Trent Schneiter, or with any broker or financial adviser whose failure to conduct adequate and reasonable due diligence prior to recommending a potentially unsuitable or fraudulent investment 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.