CLAIMANTS ALLEGE BREACH OF FIDUCIARY DUTY, CHURNING, ELDER ABUSE, FRAUD, MISREPRESENTATION, NON-DISCLOSURE OF MATERIAL FACTS, UNSUITABILITY, FAILURE TO DIVERSIFY, OVER-CONCENTRATION OF POSITIONS, UNAUTHORIZED TRADING AND NEGLIGENCE REGARDING INVESTMENTS IN THEIR ACCOUNTS. FROM 2012 - 2014.

$24,999.00

FINRA

Laverty was named a respondent in a FINRA complaint alleging that that during consecutive associations with several member firms, he borrowed $1,350,000 from an elderly married couple in violation of each firm's policies. The complaint alleges that three of the firms prohibited their representatives from borrowing money from their customers. Although a firm permitted loans between representatives and customers under limited circumstances, any such loan required the written approval of the chief compliance officer. The firm's chief compliance officer never provided any such approval to Laverty. The complaint also alleges that Laverty concealed the loans from his firms and falsely stated on annual compliance questionnaires and on a heightened supervision attestation that he had not borrowed money from customers. For an example, Laverty lied on a firm's compliance questionnaires concerning soliciting or accepting a loan from or making a loan to a client and having a judgment against him. On a firm's annual compliance questionnaire, Laverty's answers were false because earlier he had borrowed $45,000 from the elderly couple. Moreover, the Superior Court of California, County of Riverside, entered a judgment against Laverty for $114,456.25 in a lawsuit by the Security Bank of California against him arising from his failure to repay a promissory note. Laverty was aware of this judgment. The complaint further alleges that Laverty concealed the loans from FINRA and provided false on-the-record (OTR) testimony during a previous FINRA investigation into his borrowing activity. During an OTR taken in that investigation, FINRA questioned Laverty about loans from five particular customers, and then asked, "Mr. Laverty, did you borrow from any other customers?" Laverty answered, "No" and insisted that he had only borrowed from these five customers. Laverty's answers were false. Laverty had, in fact, also borrowed from the elderly couple. In addition, Laverty executed a $1.4 million promissory note for the loans that the elderly couple had extended to him and quickly breached the agreement by making none of the required monthly payments. The elderly couple filed a Statement of Claim against Laverty and the firms through which he registered. One of the firms filed a Form U5 Amendment disclosing the Statement of Claim and informing FINRA, for the first time, that Laverty had improperly solicited and accepted loans from the elderly couple. Neither of these elderly customers lived to see their claims resolved. Nevertheless, days before a scheduled arbitration, the elderly couple, through their successor in interest, settled their claim against Laverty. Soon thereafter, Laverty breached his obligations under the settlement by failing to make a required payment. FINRA suspended Laverty for failure to comply with the settlement. In addition, the complaint alleges that Laverty willfully failed to update his Form U4 to disclose an unsatisfied judgment entered in the Security Bank of California lawsuit and a federal tax lien.

Decision

Bar (Permanent)

All Capacities

Indefinite

12/22/2020

Monetary Penalty other than Fines

$3,841.60

The decision includes a finding that Laverty willfully failed to disclose a material fact on a Form U4, and that under Section 3(a)(39)(F) of the Securities Exchange Act of 1934 and Article III, Section 4 of the FINRA By-Laws, this omission make him subject to a statutory disqualification with respect to association with a member.

Hearing Panel decision rendered November 13, 2018 wherein Laverty was barred from association with any FINRA member in all capacities and ordered to pay hearing costs in the amount of $2,483.22, consisting of a $750 administrative fee and $1,733.22 for the cost of the transcript. The sanction was based on findings that Laverty borrowed $1,350,000 from customers, an elderly married couple, while registered with four member firms without disclosing the loans to the firms or obtaining their approval. The findings stated that three of the firms prohibited registered representatives from borrowing from any client whereas one of the firms permitted loans under limited circumstances but only with its Chief Compliance Officer's written permission, which he never provided to Laverty. Laverty had extracted eight separate loans totaling $1.35 million, which he never repaid. Had he sought the firms' written approval for the loans as required by FINRA rules, he likely would have been prevented from borrowing the money and the elderly customers would not have suffered any loses at his hands. The findings also stated that Laverty provided false answers on a firm's heightened supervision attestation about borrowing from customers and on another firm's annual compliance certification about borrowing from customers and having no judgements entered against him. The findings also included that Laverty provided false testimony to FINRA during a prior investigation into his borrowing from other persons. FINRA found that Laverty willfully failed to disclose material information on his Uniform Application for Securities Industry Registration or Transfer (Form U4) in regards to a civil judgment and tax lien. For his willful failure to disclose material information on his Form U4 Laverty would be suspended for nine months and fined $15,000. Laverty was barred in all capacities for borrowing from customers and providing false statements to his firms on an annual compliance questionnaire and a heightened supervision attestation and is separately barred in all capacities for providing false testimony to FINRA. In light of the bars, the Panel does not impose the suspension and fine. On December 5, 2018, Laverty appealed the decision to the NAC. NAC decision rendered December 22, 2020, wherein the findings made are affirmed and the sanctions imposed by the Hearing Panel are affirmed. The decision is final on January 25, 2021.

FINRA

Respondent Laverty failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.

Letter

Suspension

All capacities

Indefinite

Continues until required payment is made or discharged.

12/12/2017

Pursuant to Article VI, Section 3 of FINRA By-Laws, and FINRA Rule 9554, Respondent Laverty is suspended on December 12, 2017 for failure to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.

FINRA

Respondent Laverty failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.

Letter

Suspension

All Capacities

Indefinite

Continues until required payment is made or discharged.

7/21/2017

Pursuant to Article VI, Section 3 of FINRA By-Laws, and FINRA Rule 9554, Respondent Laverty is suspended on July 21, 2017 for failure to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.

California

Charles Laverty borrowed money from clients, suffered a FINRA suspension, and failed to update his U-4 with the suspension and several civil judgments filed against him.

Order

Bar (Permanent)

Bar from employment, management or control of Investment Advisor, Broker-Dealer or Commodity Broker

permanent

2/3/2017

Claimants allege from 2008 - 2016 Breach of fiduciary duty,Unsuitable Investment Strategy, Financial Abuse, Fraud by misrepresentation, Improperly solicited & accepted loans from claimants.

$1,500,000.00

$375,000.00

TCFG Investment Advisors, LLC

Permitted to Resign

Violated the firm's policies by failing to disclose litigation.

FINRA

Without admitting or denying the findings, Laverty consented to the sanctions and to the entry of findings that he borrowed a total of $1,205,000 from two married couples who were his customers, and Laverty accepted two other loans, totaling $32,500, from a separate customer, when both of his associated member firms written policies prohibited such customer loans by their registered representatives. The findings stated that Laverty did not notify the firms of, or obtain their advance approval for, any of the loans. Although Laverty has repaid the $32,500 loans from the separate customer, Laverty has not fully repaid the other loans from the married couples, despite repeated promises to do so. The firms learned of the loans from the married couples when three of these customers filed an arbitration claim. The fourth of these customers died and was not a party to the arbitration claim. Also, one of the firms learned of the loans from the separate customer when he contacted it regarding one of his investments. The findings also stated that Laverty denied that he had borrowed from customers in annual questionnaires he completed for both firms. In addition, Laverty claimed on the annual certifications to one firm that he had kept information on his Form U4 current when actually, Laverty willfully failed to report on his Form U4 the existence of at least two unsatisfied judgments. The findings also included that Laverty willfully failed to amend his Form U4 to report the two unsatisfied judgments, material information. Laverty has satisfied both judgments.

Acceptance, Waiver & Consent(AWC)

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

$5,000.00

Suspension

any capacity

18 months

12/21/2015

6/20/2017

Respondent understands that this settlement includes a finding that he willfully omitted to state a material fact on a Form U4, and that under Section 3(a)(39)(F) of the Securities Exchange Act of 1934 and Article III, Section 4 of FINRA's By-Laws, this omission makes Respondent subject to a statutory disqualification with respect to association with a member.

CLAIMANTS ALLEGE THAT THE FA RECOMMENDED UNSUITABLE INVESTMENTS. MADE REPRESENTATIONS REGARDING INVESTMENT RISKS AND IMPROPERLY SOLICITED LOANS FROM CLAIMANTS.

$1,500,000.00

$1,369,320.00

The Award has not been paid.

12/29/2015 - CLAIMANTS WITHDREW ALL ALLEGATION AND ONLY PURSUING THE REPAYMENT OF LOAN. I DENY EACH AND EVERY ALLEGATION OF THE CLAIM. I HAVE MANAGED THE ACCOUNTS FOR THIS FAMILY FOR FIVE YEARS WITH DILIGENCE AND TO THE BEST OF MY ABILITY. DURING THE TIME I MANAGED THESE ACCOUNTS, THE ACCOUNTS HAD AN OVERALL POSITIVE RETURN. IN ADDITION, I BELIEVE THE CLAIMANTS HAVE IGNORED THE FACT THAT THEY WITHDREW IN EXCESS OF $12,000,000.00 FROM THE ACCOUNTS OVER THAT TIME AND ARE ATTEMPTING TO RECOVER DAMAGES CAUSED BY THEIR OWN, SELF-DETERMINED WITHDRAWALS FROM THE ACCOUNTS, COUNTING WITHDRAWALS THEY TOOK FROM THE ACCOUNTS AS LOSSES.

UBS FINANCIAL SERVICES INC.

Voluntary Resignation

MR. LAVERTY RESIGNED WHILE UNDER REVIEW FOR BORROWING MONEY FROM A CO-WORKER WITHOUT SEEKING THE FIRM'S APPROVAL OR DISCLOSING IT TO THE FIRM, AS REQUIRED BY FIRM POLICY.

CUSTOMERS ALLEGE THAT MR. LAVERTY FAILED TO FOLLOW THEIR INSTRUCTION TO SELL THEIR AMR STOCK IN DECEMBER 2007. DAMAGES UNSPECIFIED, BUT BELIEVED TO BE OVER $5,000.00

$15,498.66

I WAS NEVER NOTIFIED OF THIS CUSTOMER COMPLAINT BY ANY PERSONNEL OF MORGAN STANLEY NOR WAS I EVER ASKED TO CONTRIBUTE TO ANY SETTLEMENT. THIS WAS A CLIENT OF ANOTHER BROKER WITH WHOM I SHARED A JOINT PRODUCTION NUMBER. IN THE FOURTH QUARTER OF 2007 MORGAN STANLEY NOTIFIED ITS BRANCHES OF A BLOCK SALE OF AMR (AMERICAN AIRLINES) THAT WOULD BE AVAILABLE. I DON'T REMEMBER THE TOTAL NUMBER OF SHARES HOWEVER I AND MY PARTNER CALLED A FEW CLIENTS AND ASKED IF THEY WERE INTERESTED IN THE EQUITY. THE CLIENT PURCHASED A NUMBER OF SHARES HOWEVER I DON'T REMEMBER THE EXACT AMOUNT. THE NEXT FEW DAYS THE STOCK DECLINED IN VALUE AND CLIENT CALLED AND QUESTIONED WHAT HAPPENED. AT NO TIME DID HE EVER TELL OR DIRECT ME TO SELL THE AMR POSITION. I ONLY HAD ONE CONVERSATION WITH HIM. CLIENT AND HIS WIFE WERE CLIENTS OF MY PARTNER. AGAIN MORGAN STANLEY NEVER NOTIFIED ME OF THE COMPLAINT EVEN THOUGH I WORKED THERE FOR ONE MONTH AFTER THE COMPLAINT WAS FILED. I PLAN TO PURSUE THE DISMISSAL OF THIS COMPLAINT THROUGH MY ATTORNY

NUMBER OF COUNTS 1 RAPE 1ST: FORCIBLE COMPULSION - FELONY PLEA NOT GUILTY

FELONY

DISMISSED

OWED BAR IN NASSAU COUNTY NEW YORK. LADY TOLD POLICE THAT SHE WAS RAPED BY OWNER. I WAS AT MY HOME AT THE TIME. CHARGE WAS DISMISSED BY GRAND JURY.

FRAUDULENT CHECK, 1 COUNT, MISDEMEANOR, NO PLEA-CHARGES DROPPED

MISDEMEANOR

DISMISSED

DISMISSED CHECK NOT COVERED BY PARENTS

NUMBER OF COUNTS 1 GRAND LARCENY IN THE 1ST DEGREE AUTO - FELONY PLEA NOT GUILTY

FELONY

DISMISSED

MYSELF AND TWO OTHER BOYS TOOK BAKERY TRUCK FOR JOY RIDE. CHARGES WERE DISMISSED.

FRAUDULENT CHECK, 1 COUNT, MISDEMEANOR, CHARGES DROPPED

MISDEMEANOR

DISMISSED

DISMISSED - CHECK NOT COVERED BY PARENTS