A former registered rep currently at the center of investor complaints seeking millions of dollars in damages was sued by FINRA on Friday, the first step in the advisor being barred from the securities industry.
The advisor, James Walesa, worked in the securities industry for 39 year before leaving in 2021 and then became CEO of a senior care technology company, Clearday Inc.
Walesa was registered at Triad Advisors from 2000 to 2019 and then Arkadios Capital for two years before leaving the industry. He was based in Park Ridge, Ill.
According to Walesa’s BrokerCheck report, he and the firms cited above are facing seven investor complaints related to allegedly unsuitable illiquid alternative investments he sold to clients, with the largest pending claim seeking $34 million in damages. Meanwhile, firms have settled seven investor complaints stemming from Walesa’s sales of products.
According to FINRA’s complaint, which was filed against Walesa on Friday with FINRA’s internal Office of Hearing Officers, the former advisor in 2020 recommended that an 85-years-old client invest $200,000 from the family trust in the highly speculative Clearday. The client passed away three weeks later.
Walesa later recommended the client’s daughter invest $100,000 from the family trust into Clearday, which was then called AIU Alternative Care Inc., according to FINRA.
The family in 2023 then filed a lawsuit – or statement of claim – alleging its investment in Clearday was worthless. Walesa disclosed his role with the company as CEO and chairman, but with the outside company, and stated it was not investment related, according to FINRA.
“Walesa has affected over 100 customer who have lost millions of dollars in investments that they had no business being in,” said Adam Gana, a plaintiff’s attorney who is suing brokerage firms on behalf of some of Walesa’s clients. “Why wasn’t he supervised appropriately? He should have been barred from the industry years ago.”
A spokesperson for Arkadios Capital declined to comment.
A spokesperson for Osaic, the broker-dealer network that recently absorbed Triad Advisors, did not respond to requests for comment.
A spokesperson for Walesa and Clearday did not return a call to comment.
In its complaint, FINRA alleges that Walesa has not responded to its requests for information in its investigation into the matter.
FINRA staff in November 2023 begin its inquiries into the families complaint involving Walesa, including whether he committed sales practice violations and participated in undisclosed private securities transactions while he was registered with Arkadios, according to the complaint.
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