SEC Bars Next Financial Stockbroker For Fraud
Douglas P. Simanski of Altoona Pennsylvania a stockbroker formerly employed by Next Financial Group Inc. has been barred by Securities and Exchange Commission (SEC) from being a stockbroker or investment advisor or otherwise associating with securities broker dealers or investment advisories according to an Order containing findings that Simanski engaged in securities fraud. In the Matter of Douglas P. Simanski Administrative Proceeding File No. 3-18889 (Nov. 8, 2018).
According to the SEC Complaint preceding the Order, a fraudulent investment scheme was operated by Simanski when he was associated with Next Financial Group Inc. Securities and Exchange Commission v. Douglas P. Simanski Civil Action No. 3-18-cv-00221 (W.D.P.A. Nov. 2, 2018). Allegedly, more than $3,900,000.00 worth of investments in companies Simanski owned had been made by twenty-seven investors because of them being induced by Simanski’s false or misleading statements.
The Complaint stated that customers were told that their funds would be invested in one of three ventures which included coal mining companies that Simanski claimed to own; a rental car company; and a tax free investment that would provide investors with fixed returns. SEC alleged that some of the investors who fell victim to Simanski’s scheme were elderly and retired. The Complaint also stated that funds failed to be invested according to the representations made by Simanski as the stockbroker utilized the customer’s funds for his personal use.
Simanski subsequently consented to being permanently enjoined from engaging in violations of federal securities laws including Securities Exchange Act of 1934 Section 10(b), Securities Act of 1933 Section 17(a), Investment Advisers Act Section 206, and Rules 10b-5 and 206(4)-8. Civil Action No. 18-cv-00221-KRG (W.D.P.A. Nov. 2, 2018). Simanski also pleaded guilty to committing felony securities fraud; conduct violative of 15 U.S.C. Sections 78(j)(b) and 78ff(a) and 17 C.F.R. 240.10b-5. Criminal Action No. 18-cr-00020-KRG (W.D.P.A. Nov. 2, 2018).
This is the second time that Simanski has been barred by a securities regulator. Specifically, Simanski has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that Simanski obstructed a FINRA investigation into allegations of his conversion of customer funds. Letter of Acceptance Waiver and Consent No. 2016049621301 (June 10, 2016). FINRA determined that Simanski’s conduct was violative of FINRA Rules 2010 and 8210.
FINRA Public Disclosure confirms that Simanski has been identified in twenty-four customer initiated investment related disputes containing accusations of his misconduct during the period in which he was employed by securities broker dealers including Next Financial Group Inc. Specifically, on December 20, 2017, a customer initiated investment related arbitration claim concerning Simanski’s conduct was resolved for $81,920.00 in damages founded on allegations that the customer was steered by Simanski towards providing a loan to Payless Rent a Car but Simanski used the customer’s funds for his own use instead. FINRA Arbitration No. 17-01416 (Dec. 20, 2017).
On April 2, 2018, another customer initiated investment related complaint in regard to Simanski’s activities was settled for $97,000.00 in damages based upon accusations that the customer experienced catastrophic losses by providing funds to Simanski for a purported tax free investment which Simanski arranged outside the auspices of Next Financial Group Inc. That day, another customer initiated investment related complaint concerning Simanski’s conduct was resolved for $440,000.00 in damages supported by allegations of Simanski causing the customer to sustain devasting losses by facilitating purchases of investments which Next Financial Group Inc. neither offered nor approved.
In addition, Simanski is referenced in a customer initiated investment related arbitration claim where the customer sought more than $5,000.00 in damages founded on accusations that Simanski misrepresented information about investments including Black Diamond Mine project; made erroneous promises concerning the rates of return to be generated from the investment; and fraudulently advised the customer to invest in the coal mining project which resulted in the customer’s losses. FINRA Arbitration No. 19-02750 (Sept. 12, 2019).
Simanski’s registration with Next Financial Group Inc. has been terminated as of June 3, 2016.