Citing "dishonest or unethical practices in the securities business," the Pennsylvania Department of Banking and Securities on Monday fined a Philadelphia area broker $200,000.
According to the BrokerCheck report for the broker, Austin Dutton, he "recommended the purchase of a security to at least one customer without reasonable grounds to believe that the transaction was suitable for the customer."
Mr. Dutton "engaged in dishonest or unethical practices in the securities business" by recommending to a client the purchase, sale or exchange of a security without reasonable consideration that the transaction was suitable, according to BrokerCheck.
Reached by phone at his firm, Bridge Valley Financial, Mr. Dutton said he could not comment on the fine.
Mr. Dutton is well known in Philadelphia for selling nontraded real estate investment trusts managed by Nicholas Schorsch's private firm, American Realty Capital (ARC), now AR Global.
After an accounting scandal at another firm headed by Mr. Schorsch, American Realty Capital Properties, in October 2014 rocked ARC,
Mr. Dutton was interviewed by the Philadelphia Inquirer about his sales of ARC REITs to Philadelphia police officers and city employees.
"I made a big mistake: I gave every client my cell number," Mr. Dutton told Inquirer columnist Joseph DiStefano at the time. "As a hundred retired policemen have said to me, 'You must be the smartest guy in the world. Or the dumbest guy in the world. Because you have all our money, and we know where you live, and we all carry guns.' There's an accountability here."
The accounting scandal at the
REIT, ARCP, resulted in its former chief accounting officer, Lisa McAlister, pleading guilty last summer to securities fraud.
Last month, the ex-chief financial officer of ARCP, Brian Block, was found guilty of securities fraud in a jury trial in New York.
Mr. Dutton said the $200,000 fine had "nothing to do with a REIT."
Mr. Dutton was registered with Newbridge Securities Corp. from 2007 until last week and is now registered with Center Street Securities Inc.
The Pennsylvania Department of Banking and Securities
last Tuesday fined Newbridge Securities $499,000 for failing to supervise a broker in connection with sales of structured products to his clients in the state.
A spokeswoman for Pennsylvania, Virginia Lucy, would not comment on whether Mr. Dutton was the broker connected to the Newbridge fine.
