Rogue Broker Barred for Obstructing Investigation
Christopher Frederic Veale, a registered representative who worked at eighteen brokerage firms in 18 years, 7 of which were expelled by FINRA, was charged by the Financial Industry Regulatory Authority (FINRA) in a Complaint alleging that Veal failed to provide written documentation, information, and on-the-record testimony concerning an investigation into potential violations of securities laws. Department of Enforcement v. Christopher Frederic Veale, No. 2015044099801 (Apr. 29, 2015).
According to the Complaint, in January, 2015, FINRA began to investigate Veale’s outside business activities, outside securities accounts, and possible sales practice concerns in his client’s account, along with failing to disclose liens and judgments on his Form U4.
The Complaint indicated that when FINRA launched their investigation, they found that Veale was working for Legend Advance Funding, a company which was not disclosed on his Form U4 that is in the business of making cash advances to small-mid size businesses. Veale, according to the Complaint, stopped working from his employer, Legend, soon after FINRA had learned about his involvement with Legend Advance Funding.
The Complaint stated that on March 11, 2015, FINRA, pursuant to Rule 8210, sent Veale a written request to provide documents and information regarding his employment with LAF among other outside business activities that Veale was engaged in. The Complaint indicated that Veale was sent two requests by Financial Industry Regulatory Authority that were not responded to. Eventually, Veale acknowledged in an e-mail to FINRA that he received a request and would appear for on-the-record testimony, where Veale then failed to show up. The Complaint further stated that on March 25, 2015, Veale had notified FINRA that he would not be responding or complying with their requests. Veale was found to have impeded FINRA’s ability to complete their examination, which prompted their claim that Veale violated Rule 8210 and 2010.
FINRA registered representatives like Veale who do not cooperate with FINRA’s investigations often face a permanent bar from practicing in the securities industry as such lack of cooperation violates FINRA’s Rule 8210 – requiring that no member or person shall fail to provide information or testimony or permit an inspection and copying of books, records, or accounts pursuant to the rule. FINRA typically accompanies a Rule 8210 violation with a Rule 2010 violation when individuals, according to FINRA, do not appear to observe high standards for commercial honor and just and equitable principles of trade.
Christopher Veale has been subject to twenty-six disclosures in his career, including customer disputes, judgment/liens, regulatory issues, criminal dispositions, and investigations. On February 21, 2001, Veale settled with a customer alleging that he engaged in unauthorized trading. On May 23, 2002, Veale settled a customer dispute for $25,000 after a client alleged unauthorized trading. On July 1, 2002, Veale settled a dispute for $15,000 after a customer alleged unauthorized trading. On July 15, 2002, Veale settled with a client for $17,562.09 after the client alleged unfair commissions. On December 3, 2002, Veale settled a customer dispute for $35,000.00 after a client alleged breach of fiduciary obligations, omissions and failure constituting negligence, failure to adhere to customer objectives, unsuitable/unauthorized transactions, and improper trading practices. Veale settled a customer dispute for $35,000.00 on July 29, 2003, after a client alleged unauthorized trades.
On January 30, 2004, Veale settled a dispute for $20,750.00 after a client alleged poor performance. He settled with a client for $17,225.00 on May 5, 2004, after another allegation of poor performance, along with claims that Veale poorly managed the investments and generated high commissions. On August 17, 2004, Veale settled a claim with a client for $90,000 alleging unsuitability, excessive trading, and breach of fiduciary duty. On May 31, 2011, Veale became subject to a customer dispute (pending), where a customer alleged poor service, and failure to communicate, and dealing without approval. Finally, Veale settled with a client for $71,500.00 on February 13, 2012, after the client drew concerns about commissions.
On December 22, 2004, the NASD had suspended Veale after Veale consented to findings that he engaged in a pattern of trading activity that was considered excessive in light of customer objectives, financial situations and needs. On September 7, 2005, Veale’s application was also summarily denied by the state of Illinois pursuant to 8.E(1)(J) of the Illinois Securities Law.
Additionally, the State of Rhode Island investigated and eventually charged Veale with engaging in churning the account of a senior investor from August, 2010- May, 2012, depleting the investors’ balances via trading losses while Veale gained via brokerage commissions. Finally, the Commonwealth of Massachusetts investigated and eventually charged Veale with churning, unsuitable transactions, fraud, and excessive commissions/markups. Both states’ cases are pending.
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, Esquire, 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.