NAC Decision: Brokerage Firm With Office in Florida Made Material Omissions and Material Misrepresentations to Investors
Cantone Research, Inc. (CRD#: 26314) is a New Jersey-based brokerage firm with a branch office in Florida. In 2015, the Financial Industry Regulatory Authority (FINRA) filed a complaint against this broker-dealer and its principals — alleging promissory note fraud.
On January 16th, 2019, the National Adjudicatory Council (NAC) released its decision in the case, finding that Cantone Research and its President Anthony Cantone made material misrepresentations and material omissions in connection with private placement investments.
Here, our Miami financial advisor fraud lawyers provide an overview of the decision from the NAC. Full details related to this case can be found by referencing Complaint No. 2013035130101.
Private Placement Securities: Promissory Note Fraud
FINRA filed a fraud complaint against Cantone Research and its President Anthony Cantone following allegations of private placement securities fraud. According to FINRA, investors sustained multiple millions of dollars in losses after four different private placement promissory notes defaulted. The promissory notes were related to the funding and operation of assisted living centers. In its decision, the NAC determined that Mr. Cantone and his brokerage firm made material misrepresentations and material omissions to investors.
Specifically, the misrepresentations relate to a man named Christopher Brogdon, who was involved in the business operations of the assisted living center project. Mr. Cantone and his company touted Mr. Brogdon’s prior successes in this specific industry. However, the firm failed to disclose to investors that Mr. Brogdon was previously barred from the securities industry for “egregious misconduct” related to unauthorized transactions. In addition, Mr. Brogdon was also previously indicted by federal officials on theft charges and Medicaid fraud charges. Finally, Mr. Brogdon has a history of personal bankruptcy. Yet, none of this adverse information was ever shared with investors. Only when the projects failed did investors learn about Mr. Brogdon’s true history.
The Sanctions: Suspensions/Financial Penalties
The NAC affirmed many of the proposed sanctions against both Anthony Cantone and his brokerage firm Cantone Research. To start, Mr. Cantone has been suspended from the securities industry for a period of one year. In addition, he faces $150,000 in fines. The brokerage firm Cantone Research was held jointly liable for these financial penalties.
Notably, his wife Christine Cantone has also been suspended from the securities industry for six months for her failure to properly supervise her husband — she has a supervisory role brokerage firm. She also faces a $73,000 fine, for which the firm is jointly responsible. Notably, Mr. and Mrs. Cantone previously reached a settlement with regulators in which they agreed to pay approximately $2 million in financial restitution to affected investors.
Get Help From a Miami Financial Advisor Fraud Lawyer Today
At Carlson & Associates, P.A., our Miami investment fraud attorneys are strong advocates for investors. If you or your loved one sustained significant loss as a result of financial advisor misconduct, we are here to help. To arrange a strictly private consultation, please do not hesitate to call us at (305) 372-9700. From our office in Miami, we represent investors throughout the state of Florida.
Resources:
brokercheck.finra.org/firm/summary/26314
finra.org/sites/default/files/fda_documents/2013035130101%20Cantone%20Research%20Inc.%20CRD%2026314%20Anthony%20Cantone%20CRD%201066139%20Christine%20Cantone%20CRD%202687618%20NAC%20Decision%20va.pdf