Failure to fully disclose the nature of his outside business activities has led to the Financial Industry Regulatory Authority (FINRA) suspending FMN Capital Corporation (FMNCC) advisor Jeffrey D. Stanga (CRD #6387255) for 12 months and levying a fine of $10,000 apart from $28,359.00 in restitution.
Jeffrey D. Stanga (CRD #6387255)
According to his broker report, Stanga has been a registered broker with Mission Viejo, CA-based FMNCC since October 2014. Red Cedar Residential, LLC and Chevron Finance are the outside businesses that reflect on the report.
Stanga has a record of two complaints filed by customers, both for recovery of losses arising out of the sale of unsuitable products, and both filed in January 2018. In one instance, against a claim of $150,000 the customer was awarded $75,000. In the other, though damages claimed were $225,000, and a settlement was reached at $46,000. Stanga, in the Broker Comments section in the profile, in connection with both complaints, has claimed, “The individual bringing arbitration never was a client of FMNCC and product was sold by Jeff Stanga prior to joining FMNCC.”
The Complaint Case
Private placement of membership units connected with a residential real estate flipping business was apparently sold by Stanga, before registering with his member firm. The Form U4 declaration of his involvement as “investor, gives advice/opinions on buying/fixing/selling residential homes,” fell short of disclosing that he was an investment-related business and his role that of ‘manager,’ as determined by FINRA.
After he had started working for FMNCC, Stanga participated in private securities transactions totaling $1,160,000, facilitating renewal for customers (one of them being a firm customer), of the real estate brokerage promissory notes that he had sold prior to his registration with the firm. It appears that Stanga earned $28,359 in referral fees in connection with the transactions. According to FINRA, Stanga’s participation in private securities transactions was without providing the required written notice to the firm or receiving written approval from them.
The foregoing is based on information available in the public domain as well as the Letter of Acceptance, Waiver, and Consent.
Supervision of advisors and compliance with FINRA regulation is a requirement, and responsibility of the brokerage firm they are registered with. Violations resulting in investment losses suffered by clients, as well as failure to supervise brokers and transactions done by them, can render brokerage firms liable for the losses caused.
If you have made investment decisions based on the advice of Jeffrey Stanga and FMNCC and are worried about them, the securities attorneys at Haselkorn & Thibaut are available for a free consultation. Please call 1 888-628-5590 for a free consultation, or visit us on our website.
The White Law Group is a national securities arbitration, investor protection, securities fraud, and securities compliance law firm with offices in New York, Florida, Arizona, Texas, and North Carolina. We are currently investigating claims arising from potential securities fraud involving Jeffrey Stanga as well as his employers for their failure to supervise.