Securities Lawyers Blog
The law offices of Gana Weinstein LLP are currently investigating claims that Broker Rudy Mejia (Mejia) has been accused by investors of engaging in fraudulent misappropriation of their funds. According to records kept by The Financial Industry Regulatory Authority (FINRA), it appears that Mejia was employed by Estrada Hinojosa & Company, Inc. at the time of the activity. If you have been a victim of Mejia’s alleged misconduct our firm may be able to assist you in recovering funds.
FINRA BrokerCheck shows a final customer complaint on November 11, 2024.
Without admitting or denying the findings, Mejia consented to the sanctions and to the entry of findings that he participated in private securities transactions without prior written notice to his member firm. The findings stated that Mejia co-founded a pooled investment fund with an options trading strategy as well a management company to serve as the fund’s general partner. Mejia purchased $100,000 of the fund’s limited partnership interests, which were securities. In addition, seven other investors purchased a total of $738,000 of the fund’s limited partnership interests. The investors were friends or family of Mejia or of the fund’s other co-founder and none were customers of his firm. Mejia’s firm did not provide approval for his investment or his participation in the private securities transactions. The findings also stated that Mejia opened outside brokerage accounts that he did not disclose to his firm. The investment fund and its general partner that Mejia founded each opened a brokerage account at a other than Mejia’s firm. Mejia controlled, and had a beneficial interest in, those two accounts. Mejia executed 304 transactions in the accounts while registered through his firm without its prior written consent and without notifying the executing firm of his association with a member firm.
Our firm is highly experienced in pursuing cases for defrauded clients whose advisors accept client loans or sell securities through OBAs. The sale of unauthorized investment products, fraudulent schemes that disguise misused funds, and other deceptive practices are collectively known in the industry as “selling away,” a serious breach of securities laws. The term “selling away” in the industry refers to financial advisors promoting investments in businesses, promissory notes, or securities that their affiliated brokerage firm has not approved. Although certain investments may have some validity, they frequently devolve into Ponzi schemes or involve advisors unlawfully diverting funds.
However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. To adequately supervise their brokers, firms must implement systems that track advisors’ activities and communications with the public. Selling away misconduct often occurs where brokerage firms 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.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Mejia has been in the securities industry for more than 11 years. Mejia has been registered as a Broker with Estrada Hinojosa & Company, Inc. since 2012.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.
