Beginning in 2012 client alleges that registered representative recommended an unsuitable investment and in 2019 recommended the client renew said investment.

$383,014.45

$200,000.00

Clients allege registered representative recommended an unsuitable investment in 2013 or 2014.

$30,000.00

$10,000.00

Client alleges the registered representative recommended unsuitable investments.

$250,000.00

In 2015 client purchased 3 alternative products through registered representative. Client claims investments were unsuitable and were an overconcentration of their retirement assets.

$50,000.00

feburary, 2011--mcfee invested with escarcega. according to client product was unsuitable..april, 2013-chapamn invested with escargeca . according to client produsct was unsuitable

$75,000.00

$20,000.00

CENTER STREET SECURITIES, INC.

Discharged

STATE OF ARIZONA ALLEGES THAT ESCARCEGA MADE MISREPRESENTATIONS TO CUSTOMERS IN CONNECTION WITH THEIR PURCHASES OF RENEWABLE SECURED DEBENTURES. FINRA ALLEGES THAT ESCARCEGA MADE MATERIALLY FALSE MISREPRESENTATIONS OR OMMISSIONS IN CONNECTION WITH THE SALES OF RENEWABLE SECURED DEBENTURES IN VIOLATION OF SECTION 10(B) OF THE EXCHANGE ACT AND FINRA RULES 2020.

Arizona Corporation Commission Securities Division

Pursuant to A.R.S. 44-1962,Escarcega's securities salesman registration is revoked and pursuant to A.R.S. § 44-3201, his application for licensure as an investment adviser representative is denied for misrepresenting guarantees, liquidity, and risk; and dishonest or unethical practices in the securities industry including unsuitability

Consent

Cease and Desist

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

$100,000.00

Denial

Revocation

ESCARCEGA WAS NAMED AS A RESPONDENT IN A NOTICE OF OPPORTUNITY FOR HEARING ISSUED BY THE SECURITIES DIVISION OF THE ARIZONA CORPORATION COMMISSION, ALLEGING THAT HE MADE MISREPRESENTATIONS TO CUSTOMERS IN CONNECTION WITH THEIR PURCHASES OF RENEWABLE SECURED DEBENTURES. THE NOTICE SPECIFICALLY ALLEGES THAT ESCARCEGA FALSELY TOLD THE CUSTOMERS THAT THE INVESTMENT WAS LOW RISK, GUARANTEED AND FREELY LIQUIDATED, AND THAT HE MADE UNSUITABLE RECOMMENDATIONS TO 8 CUSTOMERS. THE NOTICE ALSO ALLEGES THAT ESCARCEGA HAD 2 CUSTOMERS SIGN AND DATE BLANK FORMS, AND THAT HE FALSIFIED DATA ON A SUITABILITY FORM FOR 1 CUSTOMER.

CUSTOMER ALLEGES THAT IN DECEMBER 2012, REP ADVISED THE CLIENT TO SURRENDER TWO LIFE (FIXED INSURANCE) POLICIES, WHICH RESULTED IN A COMBINED FEDERAL AND STATE TAX LIABILITY OF APPROXIMATELY $140,000.

FINRA

ESCARCEGA WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGING THAT HE MADE FALSE AND MISLEADING ORAL AND WRITTEN STATEMENTS TO CUSTOMERS IN CONNECTION WITH THEIR PURCHASES OF RENEWABLE SECURED DEBENTURES, WHICH ARE AN ILLIQUID AND HIGH-RISK ALTERNATIVE INVESTMENT. THE COMPLAINT ALLEGES ESCARCEGA FALSELY TOLD THE CUSTOMERS THAT THE DEBENTURES WERE SAFE, LOW-RISK, LIQUID, OR GUARANTEED. THE COMPLAINT ALSO ALLEGES THAT ESCARCEGA MADE UNSUITABLE RECOMMENDATIONS TO TWELVE CUSTOMERS TO PURCHASE A TOTAL OF ALMOST $1.5 MILLION OF THE DEBENTURES. ESCARCEGA'S RECOMMENDATIONS TO PURCHASE THE DEBENTURES WERE INCONSISTENT WITH HIS ELDERLY AND RETIRED CUSTOMERS' INVESTMENT OBJECTIVES AND RISK TOLERANCES AND/OR RESULTED IN AN EXCESSIVE CONCENTRATION OF THE CUSTOMER'S TOTAL INVESTABLE ASSETS OR NET WORTH IN A SPECULATIVE AND RISKY INVESTMENT. THE COMPLAINT FURTHER ALLEGES THAT ESCARCEGA DISTRIBUTED TO NUMEROUS CUSTOMERS A MISLEADING SALES BROCHURE REGARDING THE DEBENTURES. THE BROCHURE STATED THAT THE DEBENTURES ARE SECURED BY A PORTFOLIO OF LIFE INSURANCE POLICIES. IN FACT, AS STATED IN THE PROSPECTUS FOR THE DEBENTURES, THE LIFE INSURANCE POLICIES ARE PLEDGED AS COLLATERAL FOR A SEPARATE LINE OF CREDIT AND ARE NOT COLLATERAL FOR THE DEBENTURES. IN ADDITION, THE COMPLAINT ALLEGES THAT ESCARCEGA CAUSED FALSE BOOKS AND RECORDS TO BE MAINTAINED AT HIS MEMBER FIRM BY OVERSTATING HIS CUSTOMERS' NET WORTH AND ASSET COMPOSITION IN CUSTOMER ACCOUNT FORMS COMPLETED IN CONNECTION WITH THE DEBENTURES SALES. ESCARCEGA ALSO CAUSED CUSTOMER FORMS TO CONTAIN FALSE INFORMATION BY STATING THAT DEBENTURE PURCHASES BY CERTAIN CUSTOMERS DID NOT INVOLVE A PRODUCT SWITCH FROM ANOTHER INVESTMENT TO THE DEBENTURES. AS A RESULT OF HIS CONDUCT, ESCARCEGA WILLFULLY VIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER AND FINRA RULE 2020.

Decision

Bar (Permanent)

All capacities

Indefinite

7/20/2017

Disgorgement

$52,270.00

Monetary Penalty other than Fines

$6,553.16

Extended Hearing Panel Decision rendered February 29, 2016 wherein Escarcega is barred from association with any FINRA member in any capacity, ordered to disgorge as a fine $52,270, plus prejudgment interest, and ordered to pay costs of $5,267.67. The sanctions were based on findings that Escarcega intentionally or recklessly made materially false misrepresentations or omissions in connection with the sales of Renewable Secured Debentures to customers, in willful violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and FINRA Rule 2020. The findings stated that Escarcega had no basis to tell his customers that the debentures were guaranteed or safe when the prospectus was replete with warnings about their high risk as an investment. The findings also stated that Escarcega made unsuitable recommendations to customers by failing to take into account their overall financial situations and needs. The debentures were high-risk securities suitable only for investors with sufficient financial resources who could afford to lose their entire investment. These customers were not such investors. The findings also included that Escarcega caused his firm to make and preserve incorrect books and records. Escarcega failed to disclose on a customer's account documents that the purchase of more than $100,000 in debentures was a product switch and he also generated account forms that falsely inflated a couple's net worth. It was determined that FINRA did not establish by preponderance of the evidence that Escarcega distributed misleading sales literature, therefore this charge is dismissed. On March 24, 2016, Escarcega appealed the decision to the National Adjudicatory Council (NAC). The sanctions are not in effect pending the review. NAC Decision rendered July 20, 2017 wherein the NAC affirmed the sanctions and findings imposed by the Extended Hearing Panel Decision. The NAC also imposed appeal costs of $1,285.49. The bar is in effect as of July 20, 2017. The decision became final on August 22, 2017.

Extended hearing panel decision rendered February 29, 2016 wherein Escarcega is fined $52,270, plus interest, barred from association with any FINRA member in any capacity, and ordered to pay costs of $5,267.67. The sanctions were based on findings that Escarcega made materially false misrepresentations or omissions in connection with the sales of Renewable Secured Debentures (Debentures) to customers, in violation of Section 10(b) of the Exchange Act, Rule 10b-5 thereunder, and FINRA Rules 2020. The findings stated that Escarcega had no basis to tell his customers that the Debentures were guaranteed or safe when the Prospectus contained warnings about their high risk as an investment. The findings also stated that Escarcega made unsuitable recommendations to customers by failing to take into account their overall financial situations and needs. The Debentures were high-risk securities suitable only for investors with sufficient financial resources who could afford to lose their entire investment. These customers were not such investors. The findings also included that Escarcega caused his firm to make and preserve incorrect books and records. Escarcega failed to disclose on a customer's account documents that the purchase of more than $100,000 in Debentures was a product switch and he also generated account forms that falsely inflated a couple's net worth. FINRA found that it did not establish by preponderance of the evidence that Escarcega distributed misleading sales literature, therefore this charge is dismissed. On March 24, 2016, Escarcega filed with the NAC a notice of appeal of the extended hearing panel decision. The sanctions are not in effect pending the review.

CLIENT ALLEGES THAT THE ADVISOR MISINTERPRETED THE AMOUNT OF PERMISSIBLE DOLLARS FOR NEW INVESTMENT. CLIENT ALLEGES REP STATED THE RETURN ON NEW INVESTMENT WOULD MORE THAN COVER THE SURRENDER CHARGE AND TAXES INCURRED FROM THE REMOVAL INCURRED FROM THE REMOVAL OF THE OLD INVESTMENT.

$19,040.89

ACCORDING TO THE CLIENTS, THE SITUATION BEGAN WHEN THEY MEET WITH THE REP AND HIS ASSOCIATE. CLIENT HAD A CONVERSATION ABOUT WITHDRAWING DOLLARS FROM AN ANNUITIES AND PLACING THOSE DOLLARS INTO ANOTHER INVESTMENT. CLIENT MENTIONS THE CONVERSATION DISCUSSED HOW THE NEW RETURN WILL OFFSET PENALTIES FROM THE WITHDRAWAL OUT OF THE OLD INVESTMENT. CLIENT RECEIVED A REFUND CHECK FOR A PORTION OF THE NEW INVESTMENT. CLIENTS ARE NOT HAPPY WITH THE SURRENDER CHARGES AND INCOME TAXES THEY WERE CHARGED COMPARED TO THE RETURN. IN SEPTEMBER 2013, BROKER DEALER CLOSED THE COMPLAINT AND TOOK NO FURTHER ACTION. NO FURTHER CORRESPONDENCE HAS BEEN RECEIVED FROM THE CLIENTS SINCE THAT TIME.

CHASE INVESTMENT SERVICES CORP

Voluntary Resignation

REGISTERED REP VOLUNTARILY RESIGNED WHILE UNDER INVESTIGATION. CLIENT REPORTED THAT REGISTERED REP SOLD HIM AN ANNUITY THROUGH NON-FIRM APPROVED VENDOR AND TRADE WAS NOT PRINCIPLED THROUGH FIRM.

REP RESIGNED