FINRA

October 1, 2019 - Batstone was named a respondent in a FINRA complaint alleging that he willfully violated Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5(a)-(c), and violated FINRA Rule 2010 when he transferred $11,100 of his member firm customers' funds to his personal bank accounts and used the funds for his personal expenditures. The complaint alleges that Batstone solicited the firm's customers to invest a total of $75,000 in a small limited liability company purporting to provide brand management and product placement services for athletes and entertainers. In soliciting the investments, Batstone informed the customers that the company would use their funds for general operating expenses, including marketing and distribution of an energy drink. Contrary to these representations, Batstone transferred portions of the customers' funds to his personal accounts and used the funds. Batstone never disclosed to either of the customers that a portion of their investment funds would be used for his own personal expenditures. Batstone's use of investment funds for personal expenditures, rather than for the company's business purposes, was material to a reasonable investor's decision to invest in the company. The complaint also alleges that by using $11,100 of the customers' funds for his personal expenditures rather than for investment purposes, as intended by the customers, Batstone converted and made improper use of the customers' funds. Batstone has not returned the $11,100 transferred to his personal bank accounts. The complaint further alleges that Batstone never provided written notice, or otherwise informed the firm, of his participation in soliciting investments in the company, which constituted private securities transactions.

Decision & Order of Offer of Settlement

Bar (Permanent)

All Capacities

Indefinite

2/18/2020

Without admitting or denying the allegations, Batstone consented to the sanction and to the entry of findings that he willfully violated Section 10(b) of the Securities Exchange Act and Rule 10b-5(a)-(c) thereunder, and violated FINRA Rule 2020 by soliciting customers of his member firm to invest a total of $75,000 in a company purporting to provide brand management and product placement services for athletes and entertainers. The findings stated that in soliciting the investments, Batstone informed the customers that their funds would be used by the company for general operating expenses, including marketing and distribution of an energy drink. Contrary to these representations, Batstone transferred $11,100 of the funds to his personal bank accounts and used the funds for his personal expenditures. Batstone's use of the funds for personal expenditures, rather than for the company's business purposes, was material to a reasonable investor's decision to invest in the company. The findings also stated that by using the funds for his personal expenditures rather than for investment purposes, as intended by the customers, Batstone converted and made improper use of the funds. The customers did not authorize Batstone's use of a portion of their funds and he did not return the funds. The findings also included Batstone never provided written notice, or otherwise informed the firm, of his participation in soliciting investments in the company, which constituted private securities transactions.

Client alleges that two annuities she purchased were not suitable for her based on her risk tolerance.

$5,000.00

BREACH OF DUTY BY ALLEGEDLY FAILING TO AFFIRM CLIENT'S BENEFICIARY DESIGNATIONS IN WRITING MADE FORMER SPOUSE UNABLE TO COLLECT DISTRIBUTIONS UPON CLIENTS DEATH, CONTRARY TO CLIENT'S INSTUCTIONS TO REGISTRANT.

$100,000.00

$55,000.00

FINRA

NASD RULE 2110: BATSTONE, WHILE ASSOCIATED WITH A MEMBER FIRM, PARTICIPATED IN THE SALE BY ANOTHER REGISTERED REPRESENTATIVE TO BATSTONE'S CUSTOMERS AT THE FIRM, OF EQUITY INDEXED ANNUITIES ISSUED BY COMPANIES WITH WHICH BATSTONE WAS NOT AN APPOINTED AGENT. THE CUSTOMERS WERE NOT AWARE THAT THE FIRM DID NOT HAVE SELLING AGREEMENTS WITH THE ISSUING COMPANIES AND DID NOT APPROVE THE SALE OF THE SUBJECT PRODUCTS BY ITS REPRESENTATIVES, OR THAT THE REGISTERED REPRESENTATIVE WAS ACTING AS THE AUTHORIZED AGENT OF RECORD.

Acceptance, Waiver & Consent(AWC)

Civil and Administrative Penalty(ies)/Fine(s)

$5,000.00

Suspension

ALL CAPACITIES

10 BUSINESS DAYS

4/5/2010

4/16/2010

WITHOUT ADMITTING OR DENYING THE FINDINGS, BATSTONE CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE HE IS FINED $5,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR 10 BUSINESS DAYS. THE SUSPENSION IS IN EFFECT FROM APRIL 5, 2010, THROUGH APRIL 16, 2010.

WITHOUT ADMITTING OR DENYING THE FINDINGS, REGISTRANT CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THEREFORE IS FINED $5000 AND SUSPENDED FROM ANY CAPACITY FOR 10 BUSINESS DAYS EFFECTIVE APRIL 5, 2010 UNTIL APRIL 16, 2010.

$1,000.00

Civil

I am waiting to hear back to learn how to get this released. the EDD is looking into the judgment.

CLIENT ALLEGED THE FORMER ADVISOR PROVIDED POOR INVESTMENT ADVICE, DID NOT COMPLETE TRANSACTIONS AND INVESTMENTS RESULTING IN LOSSES TO THE CLIENT AND SOLD THE CLIENT AN UNSUITABLE ANNUITY.

$13,000.00

THE FIRM FOUND THE INVESTMENT ADVICE PROVIDED BY THE FORMER ADVISOR APPEARED APPROPRIATE AND THE ANNUITY WAS SUITABLE AND AUTHORIZED BY THE CLIENT. THE FIRM DID NOT PROVIDE EVIDENCE OF TRANSACTIONS OR INVESTMENTS AUTHORIZED BY THE CLIENT WHICH WERE NOT PROCESSED. THE FIRM FOUND NO JUSTIFICATION FOR SETTLEMENT WITH THE CLIENT.

CLIENT ALLEGED HE INSTRUCTED ADVISOR TO PURCHASE AN ANNUITY. CLIENT RECEIVED FUNDS FROM ANNUITY PURCHASE, BUT LOST INTEREST IN THE YEAR IT WAS NOT INVESTED.

$5,400.00

$5,400.00

CLIENT INVESTED IN A REIT AND AN ANNUITY. REIT BUSINESS WAS REJECTED BY AMERIPRISE AS THE VERSION OF THE REIT WAS CLOSED TO NEW BUSINESS. ANNUITY WAS PURCHASED. AMERIPRISE REIMBURSED THE CLIENT $5400 IN LOST OPPORTUNITY FOR ONE YEAR'S INTEREST ON $90,000 INVESTMENT.

THE CLIENT ALLEGED HE DID NOT AUTHORIZE AN IRA DISTRIBUTION TO PURCHASE AN ANNUITY WITH ANOTHER FIRM.

$8,000.00

$195.00

Tax

The lien was paid years ago but never released. I called and they said to send a check for $38 to have the lien released. The check was sent immediately and I'm waiting on the Certificate of Release.

THE CLIENT ALLEGES THAT AMERICAN EXPRESS STOLE $10,000 FROM HIM. HE DID NOTINDICATE ANY SPECIFIC PRODUCT OR TRANSACTION AND ALL OF HIS ACCOUNTS ARE INACTIVE SINCE 2003 AND EARLIER.

$10,000.00

THE FIRM MADE SEVERAL ATTEMPTS TO CONTACT THE CLIENT VIA TELEPHONE AND CERTIFIED MAIL FOR ADDITIONAL INFORMATION IN AN EFFORT TO INVESTIGATE THE COMPLAINT. THE CLIENT REFUSED TO PROVIDE INFORMATION.