IFG Stockbroker Charged By FINRA With Conversion
Martin David Batstone (also known as Marty Batstone) of San Diego California a stockbroker formerly registered with Independent Financial Group has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement in a Complaint alleging that Batstone converted a customer’s funds and engaged in securities transactions away from the securities broker dealer. Department of Enforcement v. Martin David Batstone Disciplinary Proceeding No. 2019061205201 (Oct. 1, 2019).
According to the Complaint, Batstone commenced activities on behalf of a limited liability company that was in the business of providing entertainers and athletes with product placement services as well as brand management services. Batstone allegedly helped the LLC through his management of financial accounts held in the company’s name; raising of capital for the LLC’s operations; and marketing of the company’s services. Allegedly, throughout this time, the LLC was retained by customer CD – a television personality and professional skateboarder who the company assisted with branding, marketing and distribution of an energy drink.
Allegedly, from 2015 to August of 2016, customers had been solicited by Batstone to make investments in the LLC. Some of those customers included GH and EF, who held accounts with Independent Financial Group. The Complaint alleged that GH and EF had been told by Batstone that their investments in the LLC would be utilized to market and distribute the energy drink that CD promoted, and to pay the operating expenses of the company. Customers GH and EF were allegedly led by Batstone to believe that they would receive an investment return in no later than seven years. This allegedly resulted in the customers’ collective $75,000.00 investment in the company.
FINRA Department of Enforcement stated that both EF’s and GHs funds were directed to the LLC’s accounts which were controlled by Batstone, then transferred to Batstone’s personal account unbeknownst to the customers and without their authorization. Batstone allegedly used the customers’ funds for his own benefit. The Complaint also stated that EF and GH have not received any documentation evidencing their investments in the LLC; and have instead depended entirely on Batstone’s own representations.
Allegedly, the LLC failed to remain in good standing after September of 2017, and the funds that EF and GH invested have not been repaid. FINRA Department of Enforcement alleged that Batstone’s fraudulent conduct was violative of Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5 and FINRA Rules 2010 and 2020; his conversion or theft of the customers’ funds was violative of FINRA Rules 2010 and 2150; and Batstone’s private securities transactions were violative of FINRA Rules 2010 and 3280.
FINRA Public Disclosure confirms that Batstone is referenced in six customer initiated investment related disputes containing allegations of his violative conduct during the time that he was associated with Independent Financial Group and Ameriprise Financial Services Inc. Specifically, a customer filed an investment related complaint concerning Batstone’s activities in which the customer sought at least $10,000.00 damages based upon accusations of the theft of the customers funds.
Batstone is also the subject of a customer initiated investment related civil action brought in the Superior Court of California which was resolved for $55,000.00 in damages founded on accusations that fiduciary obligations to the customer were breached during the period in which Batstone was employed by Independent Financial Group. Civil Action No. 37-2015-00011956CUMCCTL (Jan. 25, 2017). On October 16, 2017, another customer filed an investment related complaint concerning Batstone’s activities in which the customer sought damages estimated to exceed $5,000.00 based upon allegations of investments failing to be appropriate given the customer’s tolerance for risk.
Batstone’s registration with Independent Financial Group has been terminated as of April 21, 2017. He was employed by Newbridge Securities Corporation between November 12, 2018 and May 17, 2019.