FINRA

Without admitting or denying the findings, Gomez consented to the sanction and to the entry of findings that he engaged in several types of misconduct in separate Individual Retirement Accounts (IRAs) of three of his member firm's customers. The findings stated that without obtaining prior written authorization from two of these customers, who are husband and wife and senior investors, and without the firm's acceptance of the customers' IRAs as discretionary accounts, Gomez effected discretionary trades in the IRAs of the customers. The findings also stated that the trading that Gomez directed in these accounts was excessive. The turnover and cost-to-equity ratios far exceeded the thresholds indicating excessive trading. Further, the strategy was inconsistent with the investment objective of capital preservation and a moderate to moderately aggressive risk tolerance that the customers expected for their respective IRAs. Nevertheless, Gomez's trading in these IRAs resulted in losses of funds for the customers and generated considerable funds in commissions for Gomez and his firm. The findings also included that Gomez executed transactions in the third customer's IRA, who is also a senior investor, that were qualitatively unsuitable trading strategy in the customer's account. The transactions that Gomez effected in this customer's IRA resulted in market losses and commissions and fees totaling nearly $30,000. The customer learned that Gomez was not implementing the trading strategy that they had agreed upon, when he began to receive trade confirmations in the mail. He immediately complained to Gomez and the firm. He also instructed Gomez to stop effecting any transactions in his IRA. Gomez's trading in this customer's IRA was unsuitable for the customer because the investment strategy in the IRA was inconsistent with the customer's expectations and his directions to Gomez regarding the strategy that Gomez promised to implement in the account. The investment strategy was also inconsistent with the customer's moderately aggressive risk tolerance and growth investment objectives, which were reflected in the customer's new account documents for the firm. Instead, the strategy concentrated the customer's assets in a single security at a time, so a negative performance in the security that he held would have drastic effects on his IRA value. FINRA found that Gomez also effected transactions in the customer's IRA without his authorization, knowledge or consent. FINRA also found that as a result of the customer's complaint regarding his trading activity in his IRA, Gomez executed an agreement in which he agreed to repay to the customer, in an installment plan, the commissions of $9,186 generated from Gomez's trading in his IRA. Gomez proposed the dates and amounts for repayment that were incorporated in the agreement. However, Gomez never intended to honor the terms of the agreement. Without providing any explanation, Gomez failed to make the first required payment. Gomez also failed to make subsequent payments, despite repeated promises to the customer and the firm's management that he would do so. On at least two occasions, the firm withheld Gomez's commission payments in order to make partial payments to the customer. By the agreement's deadline for Gomez to fulfill his obligations pursuant to the agreement, the customer had received approximately a third of the amount due to him under the agreement, largely through the firm's intervention. By that point, Gomez had resigned from the firm, had ceased to make any payments under the agreement, and had stopped responding in any way to the customer's requests for payment. Gomez had no reasonable justification or excuse for his failure to comply with the agreement.

Acceptance, Waiver & Consent(AWC)

Suspension

Any capacity

one year

2/6/2017

2/5/2018

Respondent has submitted a sworn financial statement and demonstrated an inability to pay. In light of the financial status of Respondent, no monetary sanctions have been imposed.

Inadequate supervision, negligently failed to research RRs background, negligently hired RR, negligently failed to place RR on heightened supervision, sale of high-risk and fraudulent investments to claimant, violation of federal securities law, violation of NY Consumer Protection Act -- NY General Business Law secton 349, Breach of Contract, Common Law Fraud, Breach of Fiduciary Duty, Negligence and Gross Negligence

$100,001.00

Unauthorized trading, Excessive commission, churning, suitabiliy

$110,000.00

STATEMENT OF CLAIM ALLEGES: VIOLATION OF NY CONSUMER PROTECTION ACT AND NY BUSINESS LAW 349, BREACH OF CONTRACT, COMMON LAW FRAUD, NEGLIGENCE AND GROSS NEGLIGENCE, MISREPRESENTATION.

$110,000.00

$150,375.98

[customer] & [customer] HAD SIGNED WAIVER FORMS BACK IN JANUARY 2012 IN ACCORDANCE WITH MYSELF HIRING COUNSEL FOR THEIR DEFENSE & TO CLAW BACK FUNDS FROM THE FUND MANAGER THAT WAS FOUND FRAUDULENT. I WILL DEFEND MYSELF IN THIS ACCUSATION/COMPLAINT.

FINRA

GOMEZ WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGING THAT HE DEFRAUDED INVESTORS OF AT LEAST $499,000 THROUGH HIS PARTICIPATION IN TWO SEPARATE SCHEMES INVOLVING PRIVATE SECURITIES TRANSACTIONS AWAY FROM HIS MEMBER FIRM. GOMEZ PARTICIPATED IN THE SALE TO INVESTORS OF MEMBERSHIP INTERESTS IN ENTITIES AFFILIATED WITH A FOREIGN COMPANY, WHICH PURPORTED TO OFFER INVESTORS THE OPPORTUNITY TO PURCHASE PRE-INITIAL PUBLIC OFFERING ("IPO") SHARES OF CERTAIN COMPANIES. THE FOREIGN COMPANY WAS FRAUDULENT. RATHER THAN USING INVESTOR FUNDS TO PURCHASE PRE-IPO SHARES, ITS FUND MANAGER AND THE PRESIDENT OF ITS PURPORTED ESCROW SERVICE USED INVESTOR FUNDS FOR PERSONAL EXPENSES. GOMEZ'S FRAUDULENT SALES OF THE FOREIGN COMPANY'S MEMBERSHIP INTERESTS TOTALED $394,000 AND EARNED GOMEZ AT LEAST $22,000 IN COMMISSIONS. GOMEZ ALSO PARTICIPATED IN THE SALE TO CUSTOMERS OF SHARES IN A PRIVATE U.S. COMPANY THAT, ALONG WITH ITS WHOLLY OWNED SUBSIDIARIES, PRODUCED COAL. THE U.S. COAL COMPANY'S CREDITORS FILED INVOLUNTARY BANKRUPTCY PETITIONS AGAINST THE COMPANY AND SEVERAL OF ITS SUBSIDIARIES. GOMEZ'S FRAUDULENT SALES OF THE COAL COMPANY'S STOCK TOTALED AT LEAST $105,000 AND EARNED GOMEZ AT LEAST $14,950 IN COMMISSIONS. THE COMPLAINT ALLEGES THAT GOMEZ RECOMMENDED THE PRIVATE SECURITIES MEMBERSHIP INTERESTS TO INVESTORS WITHOUT DISCLOSING THE NUMEROUS MATERIAL, ADVERSE FACTS RELATING TO THE FOREIGN COMPANY, AND ENTITIES AFFILIATED WITH IT ALLEGED IN THE COMPLAINT, INCLUDING THE CRIMINAL HISTORY AND SECURITIES FRAUD AND CIVIL LAWSUITS AGAINST ITS PRINCIPALS. WHILE SOLICITING THE FOREIGN COMPANY'S INVESTORS, GOMEZ AFFIRMATIVELY MISREPRESENTED MATERIAL FACTS BY FALSELY REPRESENTING TO THE INVESTORS THAT THE FOREIGN COMPANY'S ENTITY HE WAS RECOMMENDING ACTUALLY OWNED, OR HAD THE RIGHT TO ACQUIRE, STOCK OF CERTAIN TRADING COMPANIES, AND THAT, BY INVESTING IN THE FOREIGN COMPANY'S ENTITY, EACH INVESTOR WOULD ACQUIRE AN OWNERSHIP INTEREST IN THE ENTITY'S STOCK FOR THE TRADING COMPANIES. WHILE SOLICITING FOR THE COAL COMPANY AND RECOMMENDING IT TO THE INVESTORS, GOMEZ AFFIRMATIVELY MISREPRESENTED MATERIAL FACTS BY FALSELY REPRESENTING THAT THE COMPANY WOULD DO AN IPO IN THE "NEAR FUTURE." AS A RESULT, GOMEZ WILLFULLY VIOLATED SECURITIES EXCHANGE ACT OF 1934 SECTION 10(B) AND RULE 10B-5 THEREUNDER. THE COMPLAINT ALSO ALLEGES THAT GOMEZ RECOMMENDED THE PRIVATE SECURITIES TO INVESTORS AND FAILED TO CONDUCT A REASONABLE INVESTIGATION OF THE FOREIGN COMPANY AND AFFILIATED ENTITIES. GOMEZ'S DUE DILIGENCE FAILED TO UNCOVER THE NUMEROUS MATERIAL, ADVERSE FACTS RELATING TO THE COMPANY, RELATED ENTITIES AND PRINCIPALS. GOMEZ MISSED OR IGNORED THE NUMEROUS RED FLAGS THAT WERE PRESENTED TO HIM BEFORE AND DURING THE TIME HE WAS SOLICITING CUSTOMERS FOR THE FOREIGN COMPANY. ALSO, GOMEZ FAILED TO CONDUCT A REASONABLE INVESTIGATION BEFORE RECOMMENDING THE COAL COMPANY TO THE INVESTORS. THEREFORE, GOMEZ DID NOT HAVE A REASONABLE BASIS TO RECOMMEND THESE COMPANIES TO THE INVESTORS. THE COMPLAINT FURTHER ALLEGES THAT PRIOR TO PARTICIPATING IN THESE PRIVATE SECURITIES TRANSACTIONS GOMEZ DID NOT PROVIDE WRITTEN NOTICE TO HIS FIRM. GOMEZ WAS REGISTERED WITH HIS FIRM WHEN HE PARTICIPATED IN THE SALE OF THE MEMBERSHIP INTERESTS AND SHARES TO INVESTORS. GOMEZ EXPECTED TO BE COMPENSATED FOR HIS PARTICIPATION IN THESE TRANSACTIONS. THE FIRM DID NOT APPROVE GOMEZ'S PARTICIPATING IN THESE TRANSACTIONS.

Decision

Bar (Permanent)

All capacities

Indefinite

3/28/2018

Monetary Penalty other than Fines

$4,978.82

Hearing Panel decision rendered June 10, 2016 wherein Gomez is permanently barred from associating in any capacity with any FINRA-member firm. The sanction is based on findings that Gomez recommended the securities of two companies, but did virtually no investigation beforehand, and failed to follow up on numerous red flags presented to him. Most significantly, while one company claimed to hold hundreds of millions of dollars in pre-IPO stock, Gomez never independently verified those claims, and when he asked questions, nobody at the company, the issuers of the stock, or the private equity firms through which the company purportedly had acquired its stock, would talk to him. In the end, Gomez based his diligence on the company almost exclusively on what was told to him by the company's founder and one of its employees, or on information gathered from a handful of websites affiliated with the company's founder. Gomez admits that he did not even search the SEC's website during his investigation of the company, and as a result of his failure to independently investigate the company, he was unaware of the numerous adverse facts described above. The findings stated that Gomez's investigation of the other company was similarly limited, since he primarily relied on information provided to him by the company's founder and other registered representatives associated with other FINRA-member firms. When Gomez questioned one of the representatives about the resignation of the company's CEO, he took at face value the explanation that the CEO had resigned because he believed the company might be bought before it went public, and that there was no more for the CEO to do. Gomez was also unable to confirm what he had been told about a member firm being the second largest shareholder in the company, and failed to press the registered representatives for answers to his questions regarding the firm's shareholder status. The findings also stated that Gomez admitted to selling away from his member firm the companies' securities while registered at the firm. The charge of fraud by making material misrepresentations is dismissed. NAC Decision rendered March 28, 2018, wherein the NAC modified the sanctions and findings imposed by the Office of Hearing Officers (OHO). The sanction was based on findings that Gomez sold securities away from his member firm without providing the firm prior written notice, recommended securities to investors, without a reasonable basis as to the suitability of those securities, and fraudulently misrepresented material facts to investors, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and FINRA Rules 2020 and 2010. The findings stated that although the Hearing Panel found that Gomez misrepresented material facts while recommending and selling the securities in question to investors, it concluded that he lacked scienter and dismissed a claim that Gomez engaged in fraud. The NAC decision reverse the Hearing Panel's finding that Gomez lacked the requisite scienter to commit fraud and found that he violated the federal securities laws and FINRA rules by misrepresenting material facts to investors. The decision will became final April 30, 2018. Fines paid in full on July 6, 2018.

ALTHOUGH PRAETORIAN, THE FOREIGN COMPANY, WAS ULTIMATELY DEEMED FRAUDULENT, THIS DOESN'T MEAN THAT MR. GOMEZ'S SALES ACTIVITIES WERE FRAUDULENT. MR. GOMEZ RELIED ON THE PROFESSIONAL REVIEW AND DUE DILIGENCE OF THE FUND MANAGER AND THE INFORMATION PROVIDED BY THE COMPANIES PUBLIC RELATIONS PERSONNEL. AS THE COMPANY WAS PRIVATE, INFORMATION REGARDING THE COMPANY, ITS ACTIVITIES AND FINANCIALS WERE LIMITED. AS TO THE US COAL DEAL, THE FIRM ULTIMATELY DECLARED BANKRUPTCY IN 2014. THERE IS NO FACTUAL EVIDENCE THAT THE FIRM COMMITTED ANY CRIME OR VIOLATED ANY LAW. ADDITIONALLY, THERE IS NO EVIDENCE OR CHARGES THAT THE COMPANY OR ITS PERSONNEL COMMITTED ANY KIND OF FRAUD. MR. GOMEZ SOLD THESE SHARES IN GOOD FAITH AND WAS NOT PRIVY TO THE FINANCIALS WHICH ULTIMATELY BROUGHT THE FIRM INTO BANKRUPTCY. MR. GOMEZ SHOULD NOT BE HELD RESPONSIBLE FOR ECONOMIC CIRCUMSTANCES OUT OF HIS CONTROL. THE ALLEGATIONS THAT MR. GOMEZ COMMITTED ANY FRAUD IS NOT ONLY INACCURATE AND A MISSTATEMENT OF FACT BUT DEFAMATORY TO MR. GOMEZ'S REPUTATION.

$43,088.26

Tax

THIS IS NOT THE CORRECT AMOUNT FROM THE IRS, I AM WAITING TO RECEIVE DOCUMENTATION FROM THE IRS WITH THE CORRECT AMOUNT. ONCE I RECEIVE THIS, I WILL START A PAYMENT PLAN WITH THE IRS.

$14,881.00

Tax

THIS IS NOT THE CORRECT AMOUNT FROM THE IRS, I AM WAITING TO RECEIVE DOCUMENTATION FROM THE IRS WITH THE CORRECT AMOUNT. ONCE I RECEIVE THIS, I WILL START A PAYMENT PLAN WITH THE IRS.