Sonn Law Group is investigating claims regarding Vito James Balsamo (CRD #2084901, Staten Island, New York). Balsamo recently submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. See FINRA Case #2013036704401. Balsamo was associated with National Securities Corp. (“NSC”) from April 2008 until February 2012. According to his CRD, Balsamo also was indicted on a felony charge of racketeering in January 2012.
FINRA found that Balsamo participated in private securities transactions without obtaining written approval from NSC. In particular, FINRA found that Balsamo solicited purchases of securities, consisting of ownership interests in V.W. Industries, LLC (“VWI”), from three customers, who invested approximately $475,000 in VWI. Balsamo received an ownership interest in VWI based on his capital-raising efforts, according to FINRA. FINRA further found that Balsamo made misrepresentations to NSC in connection with his private securities transactions in a compliance questionnaire, and that Balsamo failed to provide FINRA requested on-the-record testimony.
FINRA Rule 3280, formerly NASD Rule 3040, provides that a broker may only sell securities with the knowledge and approval of his or her firm. When a broker sells securities without processing the order through the firm and without the firm’s permission or knowledge, this violates FINRA rules and is known as “selling away.” Federal and state law define securities broadly. Therefore, even products such as leasing arrangements or promissory notes, may be securities which require firm approval. Selling away often involves investment securities that are in the form of a private placement or other non-public investment.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, National Securities may be liable for investment or other losses suffered by Balsamo’s customers.
If you were a client of National Securities Corp. or Balsamo, and have suffered investment losses or financial irregularities, please contact Sonn Law Group to explore your legal options. Sonn Law Group is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 844-689-5754 or complete our “contact form.”