On April 13, 2018, FINRA announced it barred securities broker Steven Pagartanis from associating with firms registered with FINRA. FINRA (Financial Industry Regulatory Authority, Inc.) registers and regulates securities brokers and brokerage firms.
In a Letter of Acceptance, Waiver and Consent (AWC), FINRA stated it barred Steven Pagartanis for declining to provide sworn testimony during FINRA’s investigation of Pagartanis. FINRA was investigating allegations that Pagartanis fraudulently misrepresented investments to customers and misappropriated their funds.
At that time, Pagartanis was registered as a broker for Lombard Securities after having previously worked at Cadaret, Grant & Co., Inc.
According to FINRA records, since February 2018, four of Pagartanis’s former customers filed claims against him or his firms. The customers alleged Pargatanis requested them to write checks directly to a company called Genesis, a purported real estate investment. The customers further alleged Lombard Securities did not approve its brokers to sell or recommend Genesis to their customers. At least one of the customers alleged they never received a statement for Genesis. The claims are pending resolution.
Another customer filed a claim against Pagartanis in August 2017 that is also pending. This claim alleged Pagartanis fraudulently misrepresented a real estate investment trust (REIT) to the customer and seeks damages from Cadaret Grant. In total, the five pending claims seek $975,570 in compensation from Pagartanis and / or Cadaret or Lombard.
A claim filed in October 2013 against Pagartanis alleged he caused $88,000 in losses by making an unsuitable investment recommendation. The claim settled for $80,000.
Steven Pagartanis entered the securities industry in 1989. He was registered with Cadarate, Grant & Co. Inc. from September 2012 through March 2017. Publicly disclosed information states that, on March 20, 2017, Pagartanis resigned from Cadaret a day before an examination of his office was to occur in connection with claims he sold securities not approved by his firm, committed fraud, and stole customer funds.
Later, in September 2017, Lombard Securities Incorporated hired Pagartanis where he remained until Lombard discharged him on March 14, 2018.
Recovery Options for Losses Caused by Steven Pagartanis
Brokerage firms, like Cadarate, Grant & Co and Lombard Securities, have a duty to supervise their brokers to ensure they do not violate security rules. This includes ensuring their brokers do not recommend unsuitable investments, steal clients’ funds, or engage in other fraud such as misrepresenting investments.
This also includes supervising brokers to ensure they do not sell securities not approved by a firm, a securities violation known as “selling away.” Selling away is commonly used to perpetrate fraud.
Rules also establish that brokerage firms owe investors a duty to thoroughly investigate their brokers before hiring them, including why a broker was discharged by a prior firm.
When firms fail to supervise their brokers and fraud occurs, investors have the right to pursue actions against them for losses caused by the fraud. Courts and arbitrators may find that firms are responsible for their brokers’ misconduct.
If you experienced losses while investing with Steven Pagartanis, contact Marquardt Law Office LLC to speak with a securities attorney and receive a free case evaluation.
Marquardt Law Office LLC is a securities law firm located in Chicago, IL that represents clients nationwide who have suffered losses due to misconduct such as fraud and negligence.