WASHINGTON–(BUSINESS WIRE)–The Financial Industry Regulatory Authority (FINRA) announced today that
it has barred two Buffalo-based brokers – Timothy S. Dembski and Walter
F. Grenda – from the securities industry for fraud in connection with
the sale of a hedge fund, the Prestige Wealth Management Fund, LP.
Dembski and Grenda’s misconduct occurred while they were employed with
Mid Atlantic Capital Corporation.
FINRA’s investigation found that Dembski and Grenda made material
misrepresentations and omissions to lead investors to believe that the
hedge fund was a “growth” fund that would be based on a computer
algorithm that automatically included risk protections and stop-losses
to limit losses in the fund. In fact, the fund was a highly speculative
investment, the fund’s Chief Investment Officer had complete control
over the investments made, and it was not obligated to follow the
computer algorithm. In the last full month that the fund traded, it lost
over 80 percent of its value.
Brad Bennett, FINRA’s Executive Vice President and Chief of Enforcement,
said, “In 2015, FINRA barred nearly 500 brokers from the securities
industry, and we will continue to root out those brokers who seek to
take advantage of their customers.”
FINRA found that when marketing the hedge fund, Dembski and Grenda
distributed a Private Placement Memorandum (PPM) that they knew
contained material misrepresentations about the Chief Investment
Officer’s professional experience. The PPM stated that the Chief
Investment Officer had “worked in the financial services industry for
over 14 years,” “co-managed a portfolio of over $500 million,” and was a
“Vice President of Investments for a New York based investment company,”
all of which were false.
In settling this matter, Dembski and Grenda neither admitted nor denied
the charges, but consented to the entry of FINRA’s findings.
Investors can obtain more information about, and the disciplinary record
of, any FINRA-registered broker or brokerage firm by using FINRA’s
BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2015,
members of the public used this service to conduct 71 million reviews of
broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck
or by calling (800) 289-9999. Investors may find copies of this
disciplinary action as well as other disciplinary documents in FINRA’s
Disciplinary Actions Online database. Investors can also call FINRA’s
Securities Helpline for Seniors at (844) 57-HELPS for
assistance or to raise concerns about issues they have with their
brokerage accounts and investments.
FINRA, the Financial Industry Regulatory Authority, is the largest
independent regulator for all securities firms doing business in the
United States. FINRA is dedicated to investor protection and market
integrity through effective and efficient regulation and complementary
compliance and technology-based services. FINRA touches virtually every
aspect of the securities business – from registering and educating all
industry participants to examining securities firms, writing rules,
enforcing those rules and the federal securities laws, and informing and
educating the investing public. In addition, FINRA provides surveillance
and other regulatory services for equities and options markets, as well
as trade reporting and other industry utilities. FINRA also administers
the largest dispute resolution forum for investors and firms. For more
information, please visit www.finra.org.