FINRA’s Complaint against Avenir Financial, Clements and Ibrahim centers on their sale of equity and/or promissory notes to investors beginning in November 2013. According to FINRA, Avenir Financial and Ibrahim allegedly defrauded a 92-year-old investor by failing to disclose the firm was in dire financial condition at the time they sold a 5 percent equity interest in the firm to him for $250,000.
FINRA alleges Ibrahim knew Avenir Financial was in poor financial condition when it sold the equity interest to the investor because the firm’s CEO, Clements, requested that all Avenir Financial representatives seek to raise money from investors to improve the company’s financial position. In addition, FINRA alleges Ibrahim was aware of Avenir Financial’s credit troubles because his unfunded margin trading on behalf of another customer led to a $196,000 margin call. As a result, Ibrahim allegedly committed fraud in the sale of equity or promissory notes of the firm, and Clements allegedly aided and abetted the fraud.
To make matters worse, FINRA’s Department of Enforcement investigated another Avenir Financial broker, Cesar Omar Rodriguez, and alleged he fraudulently sold promissory notes in Bull Run Capital Holdings, LLC (“BRCH”) to firm customers beginning in April 2014. According to FINRA, the BRCH promissory notes and equity self-offering materials represented that Rodriguez would use investor proceeds for general operation expenses; however, FINRA alleges Rodriguez improperly used the investors' funds for personal expenses. In total, Rodriguez raised approximately $175,000 from the aforementioned investors. Yet, Rodriguez allegedly used more than one-third, or $77,000, for his own personal use. Rodriguez was promptly barred from the financial industry on or about April 27, 2015.
Please note FINRA’s complaint only represents the initiation of a formal proceeding and does not represent actual findings of fact. Under FINRA rules, the individuals and firms named in a complaint can file a response and request a hearing before a FINRA disciplinary panel. However, possible sanctions include a fine, an order to pay restitution, censure, suspension or bar from the securities industry.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment losses investing with Avenir Financial through Ibrahim, Clements or Rodriguez, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please complete the contact form below or contact one of our attorneys at (800) 627-2179 to schedule a free consultation.