New York Securities Lawyer Blog
On May 3, 2013, the Financial Industry Regulatory Authority, Inc. (“FINRA”) filed a Complaint against Kimberly Springsteen-Abbot (“Springsteen-Abbot”), owner, chief executive and head of compliance for the broker-dealer, Commonwealth Capital Securities Corp. (“Commonwealth”), for misuse of investor funds. Commonwealth is a broker-dealer that marketed and sold 13 different equipment-leasing funds from 1993 to the present, which raised $240 million. After customers invest in the equipment-leasing funds, the customer money is purportedly invested in information technology, medical technology and telecommunications equipment that are subject to 12 to 36 month operating leases. The Complaint alleges that between December 2008 and February 2012, Springsteen-Abbot misused approximately $345,000 in customer funds for personal expenses, including, but not limited to home remodeling, trips, meals and Christmas decorations for her home. For example, according to the Complaint, Springsteen-Abbot falsified and backdated a memorandum to account for “Disney Tickets,” which were provided to FINRA staff members who conducted an examination of Commonwealth in 2011. Further, the Complaint states that Springsteen-Abbot “directed the misuse of investor funds to pay for various American Express credit card charges that were not related to legitimate business purposes of the funds.” Moreover, the Complaint attaches a 27 page exhibit referencing various purchases made with customer funds by Springsteen-Abbot, and other company executives. These purchases include, but are not limited to, a meal at a Hooters restaurant, a family vacation for Springsteen-Abbot in Orlando, Florida, and $12,414 for a 2011 board of directors meeting at the St. Regis Hotel in Kauai, Hawaii. Springsteen-Abbot has denied the allocations in the Complaint, and according to a statement released by Commonwealth “intends to vigorously defend the proceeding, [and] provide FIRNA with a clearer understanding of the expenses at issue.”
Lax & Neville LLP effectively assists investors, on both a regional and national level, that may have suffered losses as a result of their broker dealer sales practice abuses in FINRA. Please contact our team of securities fraud attorneys for a consultation at (212) 696-1999.