Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker/adviser David Phillips (CRD # 3094195) was recently suspended from the securities industry by FINRA’s Department of Enforcement. The sanction occurred as a result of an investigation into his unapproved sales of the private securities offering of Future Income Payments, LLC (“FIP”).
The owner(s) of FIP have been indicted on federal charges including conspiracy relating to its operation. In April 2018, FIP ceased business, owing nearly $300 million in unpaid investor payments. In a March 12, 2019 indictment, the United States charged FIP and its owner, Scott A. Kohn, with conspiracy to engage in mail and wire fraud related to FIP’s operations.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Mr. Phillips.
Registration Background for David Phillips
Mr. Phillips first became registered in the securities industry in 1998. He was most recently registered with Gilbert, AZ based Maloney Securities Co., Inc. (CRD # 38535). His prior registrations include ProEquities, Inc. (CRD # 15708) from February 2007 to December 2017, and ProEquities, Inc. (CRD # 15708) from April 2004 to September 2006.
FINRA’s Allegations against David Phillips
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated November 18, 2020, Mr. Phillips consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “Between May 2017 and April 2018, [Mr. Phillips] solicited eight investors to purchase $876,636 in securities of Future Income Payments, LLC (FIP)”;
- “FIP represented itself as a structured cash flow investment that purchased pensions at a discount from pensioners and then sold a portion of those pensions as a “pension stream” to investors”;
- “FIP generally promised investors a seven to eight-percent rate of return on their investment”;
- “At all times during the stated period, [Mr. Phillips’] employer member firm prohibited its registered representatives from participating in private securities transactions without prior written approval from the firm”;
- “[Mr. Phillips] received a total of $33,184 in commissions in connection with his sales of FIP securities”;
- “[Mr.] Phillips did not provide notice to his employer member firm prior to participating in the FIP sales”; and
- By virtue of his actions, Mr. Phillips violated FINRA Rule 3280, regarding outside business activities and FINRA Rule 2010, regarding principles of trade and standards of commercial honor.
FINRA Sanctions David Phillips
As a result of such violations and in addition to the above described findings and conclusions, FINRA’s November 18, 2020 AWC also indicates that Mr. Phillips consented to the following sanction(s):
- A nine-month suspension from association with any FINRA member in all capacities; and
- A fine in the amount of $5,000.00.
David Phillips has A History of Customer Complaints
In addition to the findings of FINRA’s Department of Enforcement, FINRA BrokerCheck for Mr. Phillips reveals he has a history of customer complaints and/or customer initiated arbitrations, including but not necessarily limited to the following:
- On November 28, 2018 a customer initiated arbitration was filed naming Mr. Phillips as a respondent for alleged actions that occurred while he was associated with ProEquities, Inc. The customer alleged Mr. Phillips’ recommendation of Future Income Payments, LLC, was misrepresented and improperly recommended. The customers further alleged damages in the amount of $106,368.37. On August 9, 2019, the arbitration was settled in the amount of $90,000.00.
- On October 14, 2020 a customer initiated arbitration was filed naming Mr. Phillips as a respondent for alleged actions that occurred while he was associated with ProEquities, Inc. The customers alleged Mr. Phillips misrepresented and improperly recommended unsuitable investments in Future Income Payments, LLC and annuities. The customers further alleged damages in the amount of $95,000.00. The arbitration is currently pending.
If you or someone you know has or had a brokerage account with David Phillips and have concerns regarding losses in your investments or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.