FINRA Sanctions Ameriprise Stockbroker For Selling Away
Robert Nicholas Korzik (also known as Bob Korzik) of Little Falls New Jersey a stockbroker formerly registered with Ameriprise Financial Services Inc. has been fined $8,500.00 and suspended for nine months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he engaged in private securities transactions and had provided prospective customers with documents containing unwarranted or promissory claims and which contained omissions about risks. Letter of Acceptance Waiver and Consent No. 2017056036301 (May 26, 2020).
According to the AWC, while Korzik was employed by Ameriprise, he was prohibited from recommending private securities transactions or taking part in them. The AWC stated that stockbrokers were also not allowed to advise customers on non-Ameriprise approved securities.
In September of 2016, Korzik was approached by the Chief Executive Officer of an energy company, AEC, in regard to the company’s goal of accumulating $1,200,000.00 in capital through a private offering. Korzik was provided with the company’s documents including a private placement memorandum and an investor slide deck.
FINRA stated that investors AN, JS and RS were subsequently solicited by Korzik in regard to investments in AEC. The AWC stated that Korzik took part in the customers’ purchases. The stockbroker not only provided the customers with investment materials but also took part in meetings with those involved in facilitating the customers’ purchases. The AWC stated that the customers invested $550,000.00 as a result. The investment in AEC was neither offered nor approved to be sold or recommended by stockbrokers of Ameriprise.
FINRA stated that there was no point in which Ameriprise had been provided with written notification from Korzik regarding his solicitation and participation of customers’ AEC investments. The securities broker dealer eventually learned about Korzik’s activities and had questioned him in this regard at which time Korzik denied to Ameriprise that purchases of AEC had been made by the customers. FINRA found Korzik’s conduct violative of FINRA Rules 2010 and 3280.
FINRA also cited Korzik for using unapproved communications with prospective customers. The AWC stated that prospective customers were provided with documentation which FINRA found to lack fairness and balance. The regulator indicated that there was inadequate mention of the illiquidity and risks of the investments. The AWC stated that there were unwarranted or promissory claims made in regard to the profitability of AEC in the business plan that had been provided to the prospective customers. FINRA determined that Korzik’s activities was violative of FINRA Rules 2210.
FINRA Public Disclosure indicates that Korzik has been referenced in a customer initiated investment related arbitration claim in which the customer requested $35,000.00 in damages supported by allegations that a fiduciary duty had been breached by the stockbroker and that the customer’s account was negligently administered. FINRA Arbitration No. 18-04341 (Jan. 4, 2019). According to the claim, the customer’s account had been overconcentrated in bad investments including master limited partnerships and real estate securities. The claim also alleges that unauthorized transactions were facilitated in the customer’s account.
Korzik was discharged by Ameriprise Financial on October 23, 2017 based upon accusations that he was selling away.