The Financial Industry Regulatory Authority says it is has suspended San Antonio adviser Pinnacle Partners Financial Corp. and its president, Brian K. Alfaro. Both are accused of not complying with a temporary cease and desist order that barred fraudulent misrepresentations.
FINRA issued the temporary order last January over Pinnacle and Alfaro’s alleged written and oral misrepresentations related to their offer and sale of oil and gas joint interests. In December, the SRO filed a complaint accusing Alfaro and Pinnacle of running a boiler room involving brokers who made thousands of calls each week to solicit investments in these ventures, which Alfaro either controlled or owned.
In its Texas securities fraud complaint, FINRA claims that Pinnacle raised over $100 million from over 100 investors and that Alfaro used some of that money for his personal expenses and unrelated business. Some of the funds that Alfaro allegedly misused came from customers that he convinced to let him move their money into fraudulent offerings. He is even accused of collecting over $500,00 in subscription costs for a well that was never drilled.
FINRA contends that Alfaro and Pinnacle grossly inflated natural gas prices, estimated gross returns and monthly cash flows, projected natural gas reserves, and purposely tried to mislead investors by giving them doctored maps that didn’t include dry, abandoned, or plugged wells and getting rid of unfavorable information in well operator reports.
Related Web Resources:
FINRA Suspends Pinnacle Partners and its President Brian Alfaro, FINRA, April 19, 2011
FINRA Suspends San Antonio Advisory Firm for Operating a “Boiler Room”, Financial Planning, April 19, 2011
Read the Cease and Desist Order (PDF)
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