Securities Lawyers Blog
The law offices of Gana Weinstein LLP are investigating customer complaints concerning Patric Baccam (Baccam) (a/k/a Khanh Sengpraseuth) sale of promissory notes in securities transactions that appear to have been away from the firm (also referred to as “selling away”). According to The Financial Industry Regulatory Authority (FINRA) BrokerCheck records Baccam was registered with brokerage firm Centaurus Financial, Inc. (Centaurus) from February 2002 until December 2011. According to the records Baccam’s outside business activities include flipping real estate, vending machine leasing, and health and life insurance.
Baccam has also been subject to at least five customer complaints. Some of these complaints allege that Baccam solicited clients to invest in promissory notes through The Moret Group LLC, The PR Group, and The Precision Research Group, LLC. The complaints allege fraud, fraudulent misrepresentation, negligence, breach of fiduciary duty, and violation of California securities laws.
The allegations against Baccam are consistent with “selling away” securities violation. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though the brokerage firm claim ignorance of their advisor’s activities, under the FINRA rules, a brokerage firm owes a duty to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away often occurs in brokerage firm that either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.