On July 31, 2015, the SEC filed a Complaint against Frederick Alan Voight, DayStar Funding, L.P. located in Texas for selling fraudulent promissory notes through entities including DayStar and FAVA. The SEC has alleged that the notes were part of a $100 million plus size Ponzi scheme, wherein new investors money is used to repay earlier investors.
Sonn Law Group has learned that certain investors invested in the Voight/DayStar promissory notes based on the recommendations of their stockbroker. It has been alleged in a pending FINRA claim that Beth Ty (CRD no. 4737319), formerly of Park Avenue Securities, recommended that her clients invest in DayStar notes. Beth Ty was a stockbroker with Park Avenue Securities in its Houston, Texas office from Jan. 2006 through July 2015. Her CRD gives no reason for her termination. However, it is noteworthy that her termination coincided with the precise time of the SEC’s complaint against Voight and DayStar. Her CRD also does not disclose that she was selling or otherwise involved with Voight/DayStar as an outside business activity.
Securities rules require that registered stockbrokers such as Beth Ty disclose and receive approval of outside business activities and the sale of any type of investment. If Beth Ty sold Voight/DayStar promissory notes without obtaining Park Avenue’s authorization, we believe she would have engaged in improper conduct called “selling away”. Due to the fact that Beth Ty was registered with Park Avenue Securities, it is our opinion that the firm would most likely be responsible for such improper conduct. Park Avenue’s independent broker dealer model is vulnerable to selling away cases based on our experience.
Selling away generally gives rise to multiple claims that investors may bring against the brokerage firm where the broker was registered such as: negligence, negligent supervision, fraud, breach of fiduciary duty and violation of a state’s securities act, amongst other things. Sonn Law Group specializes in securities arbitration and has brought dozens of selling cases against brokerage firms. Sonn Law Group has recovered millions of dollars for investors for selling away claims including obtaining a multi-million dollar award at trial against Smith Barney. If you invested in Voight/DayStar promissory notes through Beth Ty of Park Avenue Securities or other stockbrokers, please call our firm at 844-689-5754 or complete our contact form for a free and confidential consultation.