Soreide Law Group Files FINRA Arbitration for Frederick Alan Voight Victim

March 9, 2016 - PRLog -- The lawsuit filed on behalf of two Sugar Land, Texas residents alleges that former Park Avenue Securities  broker Beth Ty, inappropriately recommended that the Claimants invest their life savings with Fred Voight into his ponzi scheme.

Beth TY sold the Claimants 3 life insurance policies then recommended a guaranteed high yield investment with Frederick Voight and Daystar Funding that would generate high rates of return that were allegedly protected and would not be subject to market volatility. PARK AVENUE broker BETH TY brought Frederick Voight to the Claimants office where he explained his investment program that BETH TY also recommended and explained that she had put several of her other clients into it. PARK AVENUE broker BETH TY touted the investment and claimed she personally checked it out herself. Based off the assurances of PARK AVENUE broker BETH TY the Claimants turned over all of their savings that were ear marked for their two kid’s college fund of approximately $400,000.00.

According to the the Securities and Exchange Commission (“SEC”) charged Frank Voight, and Daystar Funding and with running  ponzi scheme. (See SEC Case 4:15-cv-02218). The SEC complaint alleges that Voight carried out as series of related note offerings through DayStar from 260 investors nationwide by promising investors that their money would be used to fund InterCore’s acquiring of a “lucrative business opportunity” involving its Driver Alertness Detection System. Voight promised annual interest payments to investors of as much as 42%. According to the SEC complaint Voight new that the opportunity did not exist and all of the $13.8 million of investor proceeds from the Driver Alertness Detection System is now gone.

The FINRA Rule 3010(a) requires each FINRA member to “establish and maintain a system to supervise the activities of each registered representative… that is reasonably designed to achieve compliance with applicable securities laws and regulations, and applicable NASD rules.” Rule 3010(a) requires all brokerage firms to supervise their employees’ compliance with all NASD rules, including the notifying their employer of any outside investments and/or detecting fraudulent activity. It is alleged that there was no adequate system in place at PARK AVENUE SECURITIES whereas BETH TY could recommend this fraudulent note program to dozens of her clients with being supervised by PARK AVENUE SECURITIES. Furthermore, there was not proper due diligence by PARK AVENUE into DayStar Funding and Frederick Voight for PARK AVENUE SECURITIES and their agents to be recommending an investment that has such obvious red flags of impossible returns. Furthermore, FINRA Rule 3040 is also applicable in this situation which is intended to protect investors from the hazards of unmonitored private securities transactions. See In re Application of Joseph Abbondante, Exchange Act Rel. No. 53066, 2006 SEC LEXIS 23, *52-53(Jan. 6, 2006). FINRA defines “private securities transactions” as transactions outside the regular course or scope” of the affiliation. Rule 3040(e). A private securities transaction is therefore not outside the scope of the affiliation, but simply outside the “regular” or primary scope. Consistent with these principles, the Courts have held that “a dispute that arises from a firm’s lack of supervision over its brokers arises in connection with its business,” even when the investor had no accounts with the firm. Vestax Securities Corp. v. McWood, 280 F.3d 1078, 1082 (6^th Cir. 2002).

The lawsuit alleges negligence, breach of fiduciary duty, and negligent supervision on behalf of Park Avenue Securities and Beth Ty. If you or a loved one had a broker recommend an investment with Frederick Alan Voight and Day Star Funding call Soreide Law Group for a free consultation at (888) 760-6552.  For more information visit http://www.SecuritiesLawyer.com.