Securities Lawyers Blog
According to broker Ismail Elmas’ (Elmas) Financial Industry Regulatory Authority (FINRA) BrokerCheck records the representative was recently discharged from CUSO Financial Services, LP (CUSO Financial) concerning allegations that the broker “converted client funds for personal use as well as participated in an unauthorized outside business activity involving investments without the firm approval…” Previously Elmas was associated with CUNA Brokerage Services, Inc.
Shortly thereafter, a customer filed a complaint against Elmas alleging that the broker took the client’s variable annuity contract, surrendered it, and sent the proceeds to a third-party – which the client says was unauthorized activity. In addition, since Elmas was terminated from CUSO Financial authorities have been unable to locate the broker. In articles, officials say that Elmas, 49, has been missing since July 29th and have warned that Elmas may be armed and should not be approached. According to reports Elmas was last seen leaving his home in his gray 2008 Toyota Prius.
The allegations against Elmas are consistent with a “selling away” securities violation. Selling away occurs when a financial advisor solicits investments in companies or promissory notes that were not approved by the broker’s affiliated firm. Under the FINRA rules, a brokerage firm owes a duty to properly monitor and supervise its employees. In order to properly supervise their brokers each firm is required to establish and maintain a system to supervise the activities of each registered representative to achieve compliance with the securities laws. Selling away often occurs in environments where the brokerage firms either fails to put in place a reasonable supervisory system or fails to actually implement that system and meet supervisory requirements.
In selling away cases, investors are unaware that the advisor’s investment advice is not authorized and potentially illegal because the securities sold are often not registered with the SEC. Typically investors will not learn that the broker’s activities were wrongful until after the investment scheme is publicized or the broker simply shuts down shop and stops returning client calls.
Investors who have suffered losses through Elmas’ outside business activities may be able recover their losses through arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away, Ponzi schemes, and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.