Here we go again. Another investment fraud perpetrated upon the pigeons of Wall Street. It sounded like the real deal -- seems to have been the likely refrain of the victims. At the time, I didn't see any problem about making the check out to the stockbroker personally. Who knew? Sounded real. Who knew. Now there's a sensible bit of investment due diligence.
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Bruce M. Harada submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Bruce M. Harada, Respondent (AWC 2012032670901, July 12, 2013).
Harada entered the securities industry in February 1993 and during the relevant time of 2007 through January 3, 2011, he was associated with FINRA member firm ING Financial Advisers, LLC. and, thereafter, until his May 19, 2012, discharge by ING Financial Partners, Inc. The AWC asserts that Harada had no prior disciplinary history.
The AWC alleges that from January 2008 through April 2012, Harada convinced some of his customers to withdraw funds from their securities accounts in order to fund an investment in a product that he represented was ING Personal Asset Management. His victims then wrote personal checks payable to Harada. Thereafter, Harada converted the funds to his personal use. According to the AWC, Harada victimized at least 13 customers to the tune of about $792,612. FINRA deemed Harada's conduct to constitute violations of NASD Conduct Rules 2330 and 2110, and FINRA Rules 2150 and 2010.
In September 2012, Harada failed to respond to written requests for information from FINRA in violation of FINRA Rules 8210 and 2010.
In accordance with the terms of the AWC, FINRA imposed upon Harada a Bar from association with any FINRA broker-dealer in any capacity.
Bill Singer's Comment
There is, however, one point that I must make. You know that ING Personal Asset Management product that Harada was selling and his customers were investing in? Guess what: It never existed. Yeah, I know, it sounds real. Still -- a simple Google search of the "ING Personal Asset Management" wouldn't produce a single hit for any product by that exact name.
Sadly, the oft-repeated admonition that I make in response to such revelations is that we have a lot of stupid folks out there who are making themselves easy targets for far too many unscrupulous stockbrokers. Two big errors were made here by investors;
1.Never, ever make out a check payable in the name of your stockbroker for any investment product. If there is some oddball compelling reason for such idiocy, speak directly to the brokerage firm, get a letter from them in writing confirming their awareness, and then, if I were you, I still wouldn't do it;
2.At a minimum, go online and search out the name of any proposed investment. If you can't find a hit for your search, call the company directly, get some confirmation in writing, and then do everything possible to determine whether it's a safe investment.
Finally, just because you get someone on the telephone doesn't mean that the person you are speaking to is who he or she says they are - and it doesn't mean that the purported organization you have reached in bona fide. It takes only a few dollars these days to get a website, an email address, a telephone number, and an office address. Be paranoid when it comes to your life's savings.