FINRA Suspends Broker-Dealer Involved in Fraudulent Oil and Gas Deals


The Financial Industry Regulatory Authority (FINRA) has suspended a broker-dealer for operating a “boiler room” selling fraudulent oil and gas investments in defiance of FINRA’s cease-and-desist order, according to Jessica Toonkel’s InvestmentNews article entitled “Finra suspends B-D that it says ‘poses serious risk’ to investors.”

FINRA had previously filed a complaint against Pinnacle Partners Financial Corp. and its president and owner, Brian K. Alfaro in December.

FINRA’s complaint reportedly alleged, among other things, that Alfaro and his associates: (i) placed thousands of cold calls misrepresenting and omitting to disclose material facts about the investments; (ii) “deliberately attempted to mislead investors by deleting unfavorable information from well operator reports and providing them with doctored maps, which omitted numerous dry, plugged or abandoned wells near their projected drilling sites”; and (iii) collected more than $500,000 for a well that was never drilled, and used those funds for unrelated personal and business expenses.

Pinnacle and Alfaro raised over $10 million in this way from more than 100 investors, according to the article.

“But despite the temporary cease-and-desist order stemming from the complaint, Pinnacle continued to ‘market oil and gas offerings through material misrepresentations, with the intent to deceive investors,'” Brad Bennett, FINRA’s executive vice president and chief of enforcement, was quoted as saying, adding: “Brian Alfaro and Pinnacle pose a serious risk to the investing public.”

“When you take a broom to a raccoon, and he stands his ground, you know he’s probably rabid,” seconded J. Boyd Page, the senior partner at Page Perry in Atlanta. “Unfortunately, it appears that any possible restitution for investors would be limited to the assets of Alfaro and his companies, if there are any and if any can be located.”

InvestmentNews reported that it was unable to reach Mr. Alfaro, there was no listing for the San Antonio-based Pinnacle Partners, and no one answered the phone at Alfaro Oil & Gas LLC, Mr. Alfaro’s investment company. Not a good sign.

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