Farmers Stockbroker Sanctioned For Selling Away
Joe McCollum Allbright of Odessa Texas a stockbroker formerly employed by Farmers Financial Solutions has been fined $10,000.00 and suspended for nine months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based on findings that (1) Allbright was selling Future Income Payments LLC investments away from Farmers Financial Solutions and (2) Allbright engaged in undisclosed outside business activities. Letter of Acceptance Waiver and Consent No. 2018059630801 (June 8, 2020).
According to the AWC, from May of 2017 to September of 2017, investors had been solicited by Allbright to make $502,000.00 in securities purchases away from Farmers Financial Solutions. The transactions involved investments in Future Income Payments LLC (FIP) – a structured cash flow investment purportedly involving the purchase of pensions from pensioners at a discount and the payment of those pension income streams to investors.
Future Income Payments investors were told that they would receive up to eight percent returns by investing. The AWC stated that at least one customer of Farmers Financial Solutions purchased Future Income Payments because of Allbright. FINRA determined that Allbright’s failure to notify Farmers Financial Solutions and procure approval before engaging in the Future Income Payments transactions constituted the violation of FINRA Rules 2010 and 3280.
In April of 2018, during the period in which almost $300,000,000.00 in investor payments were expected to be paid by Future Income Payments, the company stopped doing business. Future Income Payments and owner Scott A. Kohn have since been criminally charged with conspiracy to commit fraud.
The AWC also stated that between 2001 and September of 2017, Allbright engaged in outside business activities that he did not disclose to the securities broker dealer. FINRA revealed that he offered customers financial planning services and fixed products through Retire West Texas and that he engaged in the business of selling insurance products. The AWC stated that three compliance questionnaires administered to Allbright required his disclosure of those outside business activities. Allbright falsely attested to having disclosed his activities. FINRA determined that Allbright’s conduct was violative of FINRA Rules 2010 and 3270 as well as National Association of Securities Dealers (NASD) Rules 2110 and 3030.
FINRA Public Disclosure confirms that on August 7, 2018, a customer filed an investment related arbitration claim concerning Allbright’s activities where the customer sought $432,000.00 in damages founded on accusations that the customers were sold bad investment contracts. FINRA Arbitration No. 18-02717 (Aug. 2, 2018). According to the claim, a fiduciary duty was breached by Allbright concerning his recommendation and facilitation of the purchase of Future Income Payments away from Farmers Financial Solutions. The claim alleges that the customer was negligently advised by Allbright as to this structured settlement company and that the customer sustained catastrophic losses.
Allbright was associated with Farmers Financial Solutions between February 5, 2001 and October 3, 2017.