San Antonio Firm Suspended For Fraud
The Financial Industry Regulatory Authority (FINRA) has announced that it has suspended Pinnacle Partners Financial Corporation of San Antonio, Texas and its President, Brian K. Alfaro, for failure to comply with a FINRA Temporary Cease and Desist Order prohibiting their fraudulent misrepresentations. In the news release it is alleged that Pinnacle and Alfaro had continued to make fraudulent written and oral misrepresentations and omissions with regard to their offer and sale of certain oil and gas joint venture interests. This was in contradiction to the Temporary Order FINRA issued back on January 21, 2011.
The FINRA Executive Vice President and Chief of Enforcement, Brad Bennett, said that “Brian Alfaro and Pinnacle pose a serious risk to the investing public. Even after the issuance of a Temporary Cease and Desist Consent Order, Alfaro and Pinnacle continued to market oil and gas offerings through material misrepresentations, with the intent to deceive investors.” In the FINRA complaint, it was alleged that Pinnacle operated a “boiler room” where brokers would make thousands of cold calls on a weekly basis soliciting investments in oil and gas drilling joint ventures, which generated some $10 million from investors. It is further alleged that Alfaro and Pinnacle diverted some of the investor funds to their own business and personal use.
Some of the FINRA allegations against Alfaro and Pinnacle include grossly inflating natural gas prices, projected natural gas reserves, estimated gross returns and estimated monthly cash flows, as well as providing investors with doctored maps that omitted unfavorable information such as dry, plugged or abandoned wells. In one instance, Alfaro obtained $500,000 in subscription costs for a well that was never drilled and he used the money for his own unrelated personal and business expenses.