The White Law Group reviews the regulatory history of IBN Financial Services Inc.
IBN Financial Services (CRD No. 42360), a FINRA member firm since July 1997, is headquartered in Liverpool, New York. The firm reportedly employs approximately 80 registered representatives in 25 branch offices, according to FINRA. IBN reportedly engages in a general securities business, including the sale of equity securities, mutual funds, variable annuities, and private placements. The firm reportedly has $163 million in assets under management (AUM), as of March 2024.
IBN Financial Services has a history of regulatory issues.
According to the firm’s CRD or BrokerCheck Report, the firm has eight regulatory events on its record. The following is a review of IBN Financial’s regulatory history, including censures and fines, and arbitrations as well as customer complaints against the firm and brokers registered with the firm.
IBN Financial Services, Inc. Sanctioned for REG BI Violations
January 30th, 2025: According to a letter of acceptance,The Financial Industry Regulatory Authority has reportedly sanctioned IBN Financial and IBN’s Compliance Officer for alleged violations of Regulation Best Interest.
From January 2019 through February 2021, IBN and its compliance officer allegedly failed to reasonably supervise, and IBN allegedly failed to enforce written policies and procedures reasonably designed to achieve compliance with Regulation Best Interest (Reg BI) with respect to, a registered representative’s recommendations of alternative investments (GWG L Bonds) to two retail customers, according to FINRA.
FINRA reportedly censured and fined IBN Financial Services $50,000 and required remediation of its supervisory systems. The firm’s compliance officer was reportedly suspended for 1 month and fined $5,000 and required to attend 20 hours of continuing education regarding Regulation Best Interest.
IBN Rep Suspended for GWG L Bond Sales
January 29th, 2025: IBN Financial Services rep, Angelo Piccone was reportedly suspended by FINRA for violations of Reg BI in connection with speculative alternative investments.
Between November 2020 and February 2021, while associated with IBN, Piccone allegedly recommended that a retail customer invest 77% of her net worth, not including her primary residence, in speculative alternative investments, including GWG L Bonds. Piccone’s recommendations to the customer were not in the customer’s best interest based on her investment profile. Therefore, Piccone willfully violated Rule 15l-1(a)(1) of the Securities Exchange Act of 1934 (Reg BI) and violated FINRA Rule 2010. Picccone reportedly has three customer complaints on his record, according to FINRA.
What are GWG L Bonds?
The White Law Group has filed numerous claims representing GWG investors against brokerage firms in connection with the sale of illiquid, high risk GWG L Bonds.
GWG Holdings, Inc. was a publicly traded financial services company that initially purchased life insurance policies on the secondary market but shifted its focus in 2018-2019 to providing liquidity for holders of illiquid investments and alternative assets. Due to ongoing net losses and insufficient cash flow, GWG financed operations by selling corporate bonds, known as GWG L Bonds, through broker-dealers like IBN Financial Services.
L Bonds were high-risk, illiquid investments not secured by GWG’s life insurance portfolio or rated by any bond agency. Despite warnings in offering documents, GWG sold these bonds to retail investors. In January 2022, after a customer of IBN’s broker Piccone reportedly invested in L Bonds, GWG defaulted on its obligations and halted further sales. By April 2022, the company filed for bankruptcy.
Misrepresentation, Off Channel Communications
Further, from April 2021 to June 2022, Piccone purportedly used his personal mobile device to exchange text messages with the customer to conduct securities business. In one of those communications, Piccone allegedly “made an unbalanced, promissory and misleading statement” to the customer regarding the prospects for recovery related to one of her investments.
Because Piccone allegedly used an unapproved channel for business-related communications, IBN was unable to preserve those communications as required by Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.
This is not the first time IBN was sanctioned for the sale of risky alternative investments.
Unsuitable GPB Capital Private Placements
April 18, 2022: FINRA has censured and fined IBN Financial Services $45,000 and ordered the firm to pay $32,385 in partial restitution plus interest. The action stems from IBN’s alleged failure to disclose to eight investors in two GPB Capital Holdings offerings that the issuer had not timely filed required SEC documents, including audited financial statements.
On April 27, 2018, GPB Capital informed broker-dealers, including IBN, that audited financial statements for certain limited partnerships would be delayed due to a forensic audit. Despite receiving this notice, IBN sold $466,500 worth of GPB-related investments between June 8 and June 29, 2018, earning $32,385 in commissions.
In February 2021, the CEO of GPB Capital Holdings, along with two others, were accused of running what’s described as a massive Ponzi-like scheme, that allegedly scammed 17,000 investors across the U.S. out of over $1.7 billion, as per the U.S. Attorney’s Office for the Eastern District of New York.
More Supervisory Failures, Outside Business Activities
According to a Letter of Acceptance, Waiver and Consent, the Financial Industry Regulatory Authority has reportedly censured and fined IBN Financial Services $30,000 for supervisory failures.
From March 2021 to June 2022, IBN allegedly failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, to evaluate whether its registered advisors’ proposed outside business activities were actually outside securities activities.
IBN purportedly knew that two of its registered representatives were engaged in outside business activities that involved investment funds and private placement offerings, but the firm allegedly did not evaluate whether the activity constituted an outside securities activity, according to FINRA’s findings. Consequently, IBN allegedly violated FINRA Rules 3110, 3270.01, and 2010.
SEC Lawsuit: Former IBN Broker James McArthur Charged with Securities Fraud, has 14 Customer Complaints
June 9th, 2022: The SEC filed a lawsuit in connection with unregistered securities offering that raised more than $75 million from more than 200 investors. Between August 2017 until at least November 2017 and from no later than December 2018 until at least July 2020, investment adviser A.G. Morgan Financial Advisors, LLC, its principal Vincent J. Camarda, and its former Chief Compliance Officer James McArthur allegedly solicited investors and offered or sold promissory notes to investors in connection with a more than $500 million unregistered fraudulent offering with lending company Complete Business Solutions Group, d/b/a Par Funding).
James McArthur (CRD #2797856) was purportedly registered with IBN Financial Services during the time of the alleged fraudulent activity. McArthur, who was reportedly registered with IBN in Massapequa, NY, from 04/01/2021 – 06/17/2022, allegedly has fourteen (14) customer complaints filed against him, with claims seeking damages of more than $18 million, according to his FINRA BrokerCheck report.
IBN Financial Services Broker Barred for Ongoing Misconduct
May 28th, 2021: A former IBN broker based in Liverpool, New York was reportedly barred after he failed to provide information requested by FINRA. IBN reportedly filed an amended Uniform Termination Notice for Securities Industry Registration (Form U5) disclosing a customer complaint made against him during the period of his association with that firm leading to the bar.
A complaint filed against the IBN representative in April 2020 alleged that he “recommended investments that were unsuitable for them and failed to repay a loan.” Other allegations included failure to supervise, excessive trading, breach of fiduciary duty, and unsuitability.The rep was previously suspended in January 2020 after FINRA found that he excessively and unsuitably traded a senior customer’s accounts that resulted in a loss of approximately $39,671. The findings stated that the advisor controlled the trading in these accounts by recommending almost all of the trades.
Help for Investors
Failure to Supervise, as outlined in FINRA Rule 3110, is a regulatory violation concerning the inadequate supervision of registered representatives (brokers) and their activities within member firms (broker-dealers).
Firms that fail to supervise their advisors, can be held responsible for investment losses in a Financial Industry Regulatory Authority (FINRA) arbitration claim.
Free Consultation with Securities Fraud Attorneys
If you have suffered losses investing with IBN Financial Services, you may be able to file a claim to recover your losses. Please contact the securities attorneys at The White Law Group for a free consultation at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
We represent investors in FINRA arbitration claims in all 50 states. Our attorneys have recovered millions of dollars from many brokerage firms in the past.
The Financial Industry Regulatory Authority (FINRA) operates the largest securities dispute resolution forum in the United States, and has extensive experience in providing a fair, efficient and effective venue to handle a securities-related dispute.
Last modified: January 30, 2025
