Finra suspends B-D that it says 'poses serious risk' to investors

Finra has suspended a broker-dealer for allegedly continuing to sell fraudulent oil and gas private placements after the agency already put a temporary cease-and-desist order against it. As reported by InvestmentNews, the Financial Industry Regulatory Authority Inc. on Dec. 3 filed a complaint against Pinnacle Partners Financial Corp. and its president and owner, Brian K. Alfaro. In that complaint, the regulator alleged that Mr. Alfaro operated a “boiler room” where registered representatives placed thousands of cold calls weekly to solicit investments in Alfaro's captive oil- and gas-drilling joint ventures. Pinnacle raised over $10 million from more than 100 investors for offerings that Finra alleged “materially misrepresented or omitted facts,” according to its complaint. But despite the temporary cease-and-desist order stemming from the complaint, Pinnacle continued to “market oil and gas offerings through material misrepresentations, with the intent to deceive investors,” Brad Bennett, Finra's executive vice president and chief of enforcement, wrote in statement. "Brian Alfaro and Pinnacle pose a serious risk to the investing public,” Mr. Bennett wrote. Mr. Alfaro could not be reached by press time. There was no listing for the San Antonio-based Pinnacle Partners, and no one answered the phone at Alfaro Oil & Gas LLC, Mr. Alfaro's investment company. According to Finra's statement, Pinnacle and Alfaro “deliberately attempted to mislead investors by deleting unfavorable information from well operator reports and providing them with doctored maps, which omitted numerous dry, plugged or abandoned wells near their projected drilling sites.” The complaint also alleges that in one instance, Mr. Alfaro collected more than $500,000 for a well that was never drilled, and used those funds for unrelated personal and business expenses. A hearing is scheduled for Sept. 12.