|By Howard Frank, Pocono Record, Stroudsburg, Pa.|
|McClatchy-Tribune Information Services|
The agency's accusations, if successfully defended, may return some of those alleged ill-gotten gains.
The authority also accuses Diaz of falsifying financial information and dates. That includes fudging the net worth of some clients to make it look as if they satisfied the minimum wealth needs of a fund.
In one case, according to the enforcement bureau, Diaz made more than
The investigators said Diaz often falsely inflated his clients' net worth to get them access to more sophisticated investment instruments.
The complaint against Diaz also alleges he committed fraud in connection with alternative investments. Diaz told a client he would received a guaranteed income of 9.1 percent and his original investment would be returned after five years. Diaz described it as a "no-lose" investment. Yet, the company subject to the investment had no commitment to "kick-off" an annuity or dividend and wouldn't necessarily appreciate in value.
Diaz used this promise or "guarantee" to entice a number of investors, who ended up buying ownership in a company whose stock was unsalable for nine to 10 years, according to accusations in the report.
The report called other Diaz statements to his clients regarding returns "outrageous."
Diaz, it alleges, falsified his books and records by creating 71 false records to make unauthorized trades during the period of
The investigators claimed Diaz forged a woman's signature, overstated her risk tolerance and inflated her tax bracket.
FINRA's complaint also alleges Diaz performed unauthorized trading. In one case, the agency claims, a couple rejected his purchase proposals when they became his customer after he purchased their account from another broker. The complaint alleges the couple declined Diaz's proposals for purchases and told him they were going to move their accounts. Diaz then made
There are many other examples of unauthorized trading by Diaz alleged in the complaint.
FINRA alleges Diaz lied to customers regarding his firing from firms, a violation under the financial monitoring agency.
Diaz was fired from four firms between 2009 and 2012, according to investigators. Diaz routinely misled his customers into believing that he had left those firms voluntarily, both through affirmative statements and through his responses to questions about the circumstances of his leaving these firms, the investigators claim.
FINRA'S Department of Enforcement recommended that Diaz make complete restitution to all his victims and return any "ill-gotten" gains, and/or make full restitution, with interest, and order that Diaz bear the costs of future proceedings.
Diaz will have the opportunity to challenge the claims in front of FINRA and eventually a court.
"I have not had the opportunity to show proof to FINRA on the facts of these allegations," Diaz said in statement. "... I am extremely confident (they) are false and that I will prevail."