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San Marino, California Broker Rusty Tweed Involved in $1.4 Million Dispute Over Suitability

Rusty Tweed (CRD#: 2339324), a registered representative with Cabot Lodge Securities, LLC in San Marino, California who does business as Tweed Financial Services (CRD#: 159712) is currently involved in several customer disputes, including one in which a client alleges that Rusty Tweed misrepresented investments and recommended unsuitable investments, according to his BrokerCheck report accessed on September 25, 2019. The client, who filed the dispute on August 15, 2019, is currently seeking $1,423,796 in damages. ­Just three months before, on May 22, 2019, Rusty Tweed became involved in a pending customer dispute in which a client alleges unsuitable recommendations, requesting $500,000 in damages. On May 9, 2018, Rusty Tweed became involved in a pending customer dispute in which a client alleges “poor performance relating to an investment in Vertical US Recovery Fund II.” The client also alleges “misrepresentation against the offeror, Vertical US Recovery Fund II” and is requesting $75,000 in damages.

These are far from the only disclosures on Rusty Tweed’s BrokerCheck record, which lists a total of 16 disclosures. Most seriously, the Securities and Exchange Commission (SEC) has charged Rusty Tweed with fraud, while FINRA Enforcement barred him from the securities industry. He is currently appealing FINRA’s decision, so “the sanctions are not in effect pending the review,” according to BrokerCheck.

The Securities and Exchange Commission (SEC) filed fraud charges against Rusty Tweed and Tweed Financial Services on October 2, 2017. The SEC alleges that Rusty Tweed and his company solicited investors to contribute substantial investments to funds run by friends and acquaintances of Tweed, and that Tweed lied to investors once he realized these funds were unprofitable. He allegedly knew that the manager of Quantitative Analytics Master Fund (QAMF) had been indicted for fraud but did not disclose this, instead allegedly falsifying quarterly statements to investors to claim flat or positive returns. The SEC litigation is pending.

GettyImages-84178122-300x200Six months earlier, on April 27, 2017, FINRA Enforcement filed a complaint against Rusty Tweed, alleging that he “obtained more than $1.6 million from his retail customers through a false and misleading private placement memorandum (PPM) he used to offer and sell interests in a pooled investment fund that he both created and controlled.” FINRA also alleges that he later allowed a third-party to control the fund and “transfer $650,000 to a third party financier, purportedly to support the importation, refining, and sale of Ghanaian gold dust in the United States.”

Filing a complaint against Rusty Tweed on June 28, 2011, a client alleged, among other things, that the financial advisor breached his fiduciary duty, misrepresented investments, and sold unregistered securities under California blue sky laws. The client sought $1,800,000, but the dispute was settled for $17,500.

On July 16, 2012, Rusty Tweed lost an arbitration. The claimant, who filed the dispute on July 6, 2010 and originally requested $700,000 in damages, alleging “unsuitable investments, breach of contract, fraud, breach of fiduciary duty, negligen[ce] for the sales of Watersong Apartments and Cabon Turfway Ridge acquisition in February 2007.” The claimant received $156,250 in damages. The award letter can be viewed here.

Two months earlier, May 25, 2012, Rusty Tweed lost an arbitration. A claimant, who filed the claim on June 9, 2009, alleged “fraudulent misrepresentation, fraudulent concealment/omission … failure to supervise, breach of fiduciary, [and] breach of implied covenant of good faith and fair dealing,” among other allegations. The client originally sought $1,870,000 in damages, but the matter was originally settled for $338,000. A copy of the award letter can be viewed here

In the complaint filed on June 9, 2009, the claimant alleged “fraudulent misrepresentation, fraudulent concealment/omission, negligent misrepresentation, negligent concealment/omission, negligence, unsuitability, failure to supervise, breach of fiduciary duty, breach of implied covenant of good faith and fair dealing, elder abuse under [California] law, violation of state and federal securities laws, violations of FINRA, NAS, and NYSE rules.”

On January 19, 2005, National Planning Corporation discharged Rusty Tweed. According to the broker comment, “A Real Estate Agent took Tweed’s flyer for an approved seminar and cut and pasted it into an ad in a local weekly newspaper without Tweed’s knowledge or National Plannings [sic] approval.”

On July 18, 2003, Rusty Tweed became involved in a customer dispute in which a client claimed that “he did not receive the variable annuity policy and subsequently wanted to rescind the contract within the free look period.” The client requested $10,172.33 in damages ($9,672.33 of which represented the surrender charge). The matter was settled for $10,172.33.

In addition to his work with Cabot Lodge Securities, LLC, over his 26-year career Rusty Tweed has worked for 10 firms:

  • Concorde Investment Services, LLC (CRD#: 151604)
  • CapWest Securities, Inc. (CRD#: 30002) of San Merino, California
  • MAM Securities, LLC (CRD: 124620) of Sherman Oaks, California
  • United Securities Alliance, Inc. (CRD#: 36487) of San Marino, California
  • National Planning Corporation (CRD#: 29604) of Los Angeles, California
  • InterSecurities, Inc. (CRD#: 16164) of St. Petersburg, Florida
  • Laguna Securities, Inc.(CRD#: 37547) of Newport Beach, California
  • Wealth Resource Capital Corporation (CRD#: 10367) of Newport Beach, California
  • Securities America, Inc. (CRD#: 10205) of La Vista, Nebraska

If you’ve worked with Rusty Tweed or have questions about misrepresentation, unsuitable recommendations, or blue sky laws, don’t hesitate to contact a securities attorney. Call (877) 238-4175 or email info@fkesq.com for your free consultation.

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