FINRA’s Department of Enforcement investigated Chavis and alleged he operated an outside business, as well as syphoned funds from the business to pay for personal expenses. Specifically, in September 2012, Chavis incorporated and began operating Aqua Green Industries, Inc. – a green water treatment start-up. In order to fund the operation, Chavis allegedly solicited $118,000 from an 87-year old customer.
FINRA alleged that Chavis did not disclose this outside business activity to OneAmerica and also misused the customer’s funds. According to FINRA, Chavis commingled the customer’s Aqua Green investments with personal funds, from which he then paid personal expenses including rent for his apartment, home utilities, and a personal car lease. FINRA estimates Chavis used approximately $25,000 of the customer’s investment for personal use.
Based upon the foregoing misconduct, FINRA asserted Chavis violated several federal securities laws and financial industry rules and regulations. In particular, FINRA alleged Chavis violated FINRA Rules 2010, 2150(a) and 3270. Fro example, FINRA Rule 2150(a) states: “[n]o member or person associated with a member shall make improper use of a customer’s securities or funds.” Here, Chavis allegedly used the customer’s investment in Aqua for his own personal use in violation of FINRA Rule 2150(a).
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 Chavis through OneAmerica, 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 or contact one of our attorneys at (800) 627-2179 to schedule a free consultation.