Allstate Financial Services Broker Barred for Defrauding Customers
Phillip Leonard Grasso, formerly a representative of Allstate Financial Services, was permanently barred in any and all capacities with a FINRA regulated entity after FINRA’s Office of Hearing Officers rendered a Default Decision finding that Grasso had misused and converted client funds in violation of FINRA Rules 2010 and 2150(a), engaged in securities fraud in violation of Section 10(b) of Securities Exchange Act of 1934, Rule 10b-5, FINRA Rules 2010 and 2010, and failed to complete FINRA’s on-the-record testimony in violation of FINRA Rules 2010 and 8210. FINRA Department of Enforcement v. Philip Leonard Grasso, No. 20140409066-01 (May 13, 2015).
According to the Decision
On April 17 of 2013, Phillip Leonard Grasso had executed a healthcare proxy and power of attorney for two elderly customers, AG and PG, where Gross was designated by proxy as successor agent. The Decision indicated that AG and PG, via Grasso’s recommendation, surrendered their annuities and life insurance policies (on multiple occasions) in order to invest money in an investment/stock account. The Decision noted that Grasso, after being provided checks from AG and PG for investment, pocketed the money on several occasions by placing the monies in his personal bank account. The Decision states that Grasso would provide his customers false documents representing account balances invested in a brokerage account owned by PG which did not truly exist.
The Decision further stated that Phillip Leonard Grasso would use some of the funds to pay for his personal expenses including mortgage payments, credit card bills, insurance premiums, physical therapy, gas, cable, landscaping, and groceries. The Decision indicated that by February 19, 2014, Grasso stole $204,196.62 from AG and $227,150 from PG. FINRA, not surprisingly, referred to Grasso’s conduct as misusing and converting the customers’ funds.
The Hearing Officer also found that Phillip Leonard Grasso had omitted material facts and made willful misrepresentations in connection with his conduct with AG and PG, conduct which was considered securities fraud per Section 10(b) of the Exchange Act and Rule 10b-5. The Hearing Officer found that Grasso had acted with scienter (defined as the intent to deceive or defraud).
The Decision also noted on May 19, 2014, FINRA, pursuant to Rule 8210, provided Grasso with a written request that he appear for testimony in connection with FINRA’s investigation into the aforementioned unlawful activity. On May 22, 2014, Grass had appeared alongside his attorney to provide the sworn testimony. However, according to the Decision, Grasso, per the advice of his attorney, stopped providing testimony after a certain point despite being told that he could be subject to discipline if he did not continue to comply. Grasso’s attorney, on June 9, 2014, informed FINRA that Grasso would not be cooperating with FINRA’s testimony requests at any future point. FINRA found Grasso’s conduct of obstructing FINRA’s investigation to be in violation of FINRA Rule 2010 and 8210.
Phillip Leonard Grasso Discharged From Allstate Financial Services
Public Disclosure records reveal that prior to Grasso’s permanent bar, Grasso was terminated by discharge from Allstate Financial Services after allegations that Grasso commingled funds of two individuals into Grasso’s personal brokerage account held at a competitor firm.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.