Written by The White Law Group• April 6, 2023• 2:23 pm• Blog, Current Investigations

CFD Investments Complaints and Regulatory Actions

The White Law Group reviews the regulatory history of CFD Investments Inc.

CFD Investments, Inc, based in Kokomo, Indiana reportedly has nine disclosure events on their broker profile, according to FINRA, the self-regulator that oversees brokers and brokerage firms. According to reports, the firm had revenue of $32.1 million in 2020. The firm is dual registered as a brokerage firm and an investment advisory firm, CRD#: 25427/SEC#: 8-41727.

Table of Contents

According to their FINRA BrokerCheck profile, the firm has 7 regulatory events, two arbitrations and one bond.

CFD Investments Broker Misconduct and Customer Complaints

There have been several cases of registered representatives employed by CFD Investments who were allegedly involved in broker misconduct and fraudulent activities.

Last year, FINRA reportedly ordered CFD Investments advisor Dana Vietor to pay $5.7 million in penalties to twelve former clients after he purportedly urged them to liquidate their annuities and invest their money in a cancer treatment business he controlled.

FINRA reportedly barred Vietor in 2020 after Vietor, and his other business partners, were purportedly engaged in th start-up business venture that required funding. Vietor allegedly engaged in $3 million in sales of promissory notes to customers without disclosing and receiving approval from his member firms for each alleged private securities transaction. Vietor purportedly received indirect selling compensation as a member of the management team.

Vietor has fifteen customer complaints filed against him as of April 6, 2023. His broker report indicates on February 2023, that he “failed to comply with an arbitration award or settlement agreement…”

Private Placement Due Diligence Failures

In August 2020, FINRA reportedly sanctioned CFD Investments and an affiliated broker for alleged rules violations in connection with a private placement investment, Payson Petroleum.

In November 2014, CFD and their representative, purportedly approved an oil and gas private placement offering for sale to its customers. The issuer, Payson Petroleum, Inc. was the subject of an April 2014 jury verdict for more than $9 million and was in financial distress, according to a Letter of Acceptance Waiver & Consent (AWC).

From March 2015 to February 2016, CFD reportedly sold interests in Payson to 31 of its retail customers, without conducting reasonable due diligence into the Payson offering. CFD reportedly sold interests in Payson to its customers without having a reasonable basis for making recommendations to purchase this private placement. CFD Investments customers who invested in Payson Petroleum lost their money when Payson filed for bankruptcy in 2016.

Further, CFD also purportedly failed to disclose to its customers that it received additional compensation from Payson beyond the disclosed sales compensation.

FINRA fined CFD Investments $750,000 and suspended the firm for 45 days. FINRA reportedly suspended the broker for 45 days and ordered him to pay $5,000 in fines.

FINRA Sanctions CFD Investments for ETFs and VAs

FINRA has sanctioned CFD Investments for several supervisory failures through the years including the following:

From October 2012 to July 2014, CFD allegedly failed to establish, maintain, and enforce a reasonable supervisory system designed to ensure the review of its representatives’ sales of leveraged and inverse exchange-traded funds in violation of NASD Rule 3010 and FINRA Rule 2010. FINRA reportedly fined the firm $30,000 along with a censure, according to a Letter of Acceptance Waiver and Consent.

On January 10, 2019, FINRA censured and fined CFD Investments $125,000 for supervisory failures related to variable annuities. Between July 18, 2014 and July 18, 2016, CFD allegedly failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to ensure that representatives’ recommendations of variable annuities complied with applicable securities laws and regulations and FINRA Rules, including FINRA Rule 3110 and FINRA Rule 2010.

What is FINRA BrokerCheck?

FINRA BrokerCheck is a free online tool provided by the Financial Industry Regulatory Authority (FINRA) that allows individuals to research and verify the background and professional history of brokers, brokerage firms, and investment advisors. To use the free online tool, click here: FINRA BrokerCheck.

By accessing the FINRA BrokerCheck website, users can search for information on registered brokers, including their employment history, education, certifications, and any disciplinary actions or complaints filed against them. BrokerCheck also provides information on the broker’s current and past firms, including any regulatory or legal issues associated with those firms.

BrokerCheck is designed to help investors make informed decisions when choosing a broker or investment advisor. By researching a broker’s history and background, investors can determine whether the broker has a history of regulatory or disciplinary issues, and whether the broker has the qualifications and experience necessary to manage their investments effectively.

FINRA BrokerCheck is a valuable tool for anyone considering working with a broker or investment advisor, as it provides easy access to important information that can help investors make informed decisions about their financial future.

Brokerage Firms – Duty to Supervise

Brokerage firms have a legal and ethical responsibility of the firm to oversee the activities of its employees, including brokers and other registered representatives, to ensure that they are acting in accordance with industry regulations and the best interests of their clients.

This duty to supervise is a requirement under the rules and regulations set forth by FINRA and the Securities and Exchange Commission (SEC). Brokerage firms are responsible for implementing and enforcing policies and procedures designed to detect and prevent potential violations of these regulations, including the mishandling of client funds, fraudulent or unethical behavior, or other misconduct.

The duty to supervise also requires brokerage firms to monitor the activities of their employees and to promptly investigate any red flags or potential violations that may arise. In cases where violations are discovered, the brokerage firm is required to take appropriate action, which may include disciplining the employee or reporting the violation to regulatory authorities.

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.

Hiring a Securities Attorney

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.

With over 40 years of securities law experience, including experience working at FINRA and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.

Although our offices are in Seattle, Washington and Chicago, Illinois, our firm reviews securities fraud cases throughout the country.

The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.