Vaughn Alan Reeves – and the firm that employs him or her – is regulated by the Financial Industry Regulatory Authority (FINRA).
If you are like most people, before you go out to dinner at a new restaurant, you probably take a quick look at the reviews. This makes sense; you are going to pay for an expensive dinner, and you need to be sure that you are getting a good value.
Yet, when choosing a financial advisor, many people fail to conduct this same level of due diligence. Before turning over access to your money, you need to be sure that you have found a financial advisor that you can trust. Here, our audit report, including details of allegations, complaints, and sanctions will help you decide whether or not to invest with Vaughn Alan Reeves.
BrokerComplaints.com is currently investigating allegations related to Vaughn Alan Reeves. We provide a free platform for investors to help them in their claims against negligent brokers and brokerage firms.
About Vaughn Reeves
Vaughn Alan Reeves is an Investment Adviser. Vaughn Alan Reeves’s Central Registration Depository (CRD) number is 1194419 and the FINRA Profile can be found at – https://brokercheck.finra.org/individual/summary/1194419.
Click here to download a Detailed Audit Report for Vaughn Alan Reeves.
Vaughn Alan Reeves has previously been reprimanded and has disclosures and/or client dispute(s) listed at FINRA BrokerCheck.
Accusations and Disclosures
You can find below, a quick snapshot of Vaughn Alan Reeves’s regulatory actions, arbitrations, and complaints.
DISCLOSURE 1 –
- Event Date: 6/30/2009
- Disclosure Type: Criminal
- Disclosure Resolution: Final Disposition
- Disclosure Detail :: Criminal Charges :: Charges: SECURITIES FRAUD
- Disposition: Convicted
DISCLOSURE 2 –
- Event Date: 8/29/2005
- Disclosure Type: Regulatory
- Disclosure Resolution: Final
- Disclosure Detail :: DocketNumberFDA:
- Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Allegations: SEC ADMINISTRATIVE RELEASE 34-52353, AUGUST 29, 2005; THE COMMISSION ALLEGES THAT, FROM AT LEAST 2001 UNTIL 2005, IN CONNECTION WITH THE SALE OF CHURCH BONDS AND UNITS OF BOND FUNDS, THE RESPONDENTS MISUSED FUNDS MEANT FOR THE REPAYMENT OF BONDHOLDERS AND BOND FUND INVESTOR PROCEEDS. EMPLOYING SOLICITATIONS APPEALING TO THE CHRISTIAN FAITH OF MANY INVESTORS, THE RESPONDENTS RAISED AT LEAST $120 MILLION THROUGH CHURCH BOND ISSUANCES AND $54 MILLION THROUGH THE SALE OF BOND FUND UNITS. THE RESPONDENTS DIVERTED AT LEAST $8 MILLION WORTH OF CHURCH FUNDS MEANT TO REPAY BONDHOLDERS INTO AN ONLINE BROKERAGE ACCOUNT AT ANOTHER FIRM AND USED THOSE FUNDS TO TRADE STOCK AND OPTIONS, LOANED $617,000 OF THOSE BONDHOLDER REPAYMENT FUNDS TO A SLOW-PAYING BOND ISSUER, AND MADE UNSECURED LOANS TO THEMSELVES AND OTHER ENTITIES THEY CONTROLLED. THE RESPONDENTS MISUSED BOND FUND INVESTOR PROCEEDS BY CAUSING THE BOND FUNDS TO LOAN $535,000 TO EACH OTHER AND TRANSFERRING ALMOST $5 MILLION WORTH OF BOND FUND INVESTOR PROCEEDS TO OTHER ENTITIES THEY CONTROLLED. NONE OF THESE MISUSES OF BOND REPAYMENT FUNDS OR BOND FUND INVESTOR PROCEEDS WERE DISCLOSED TO INVESTORS. THE RESPONDENTS ALSO MISREPRESENTED THE RATES OF RETURN FOR AT LEAST FOUR BOND FUNDS. A HEARING WILL BE SCHEDULED BEFORE AN ADMINISTRATIVE LAW JUDGE TO DETERMINE WHETHER THE ALLEGATIONS CONTAINED IN THE ORDER ARE TRUE, TO PROVIDE THE RESPONDENTS AN OPPORTUNITY TO DISPUTE THESE ALLEGATIONS, AND TO DETERMINE WHAT SANCTIONS, IF ANY, ARE APPROPRIATE AND IN THE PUBLIC INTEREST.
- Resolution: Order
- Sanction Details :: Sanctions: Bar
- Sanction Details: SEC RELEASE NO. 52564, DATED OCTOBER 5, 2005; WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, REEVES CONSENTED TO THE ENTRY OF THIS ORDER. ACCORDINGLY, PURSUANT TO SECTION 15(B)(6) OF THE EXCHANGE ACT RESPONDENT IS BARRED FROM ASSOCIATION WITH ANY BROKER OR DEALER. ANY REAPPLICATION FOR ASSOCIATION WILL BE SUBJECT TO THE APPLICABLE LAWS AND REGULATIONS.
DISCLOSURE 3 –
- Event Date: 7/26/2005
- Disclosure Type: Civil
- Disclosure Resolution: Final
- Disclosure Detail :: Initiated By: U. S. SECURITIES AND EXCHANGE COMMISSION
- Allegations: SEC LITIGATION RELEASE NO. 19314, DATED JULY 27, 2005; THE SECURITIES AND EXCHANGE COMMISSION COMPLAINT ALLEGES THAT REEVES VIOLATED SECTION 17(A) OF THE SECURITIES ACT OF 1933 (SECURITIES ACT), AND SECTION 10(B) OF THE SECURITIES EXCHANGE ACT (EXCHANGE ACT) AND RULE 10B-5 THEREUNDER. IN ITS COMPLAINT, THE COMMISSION CHARGED RESPONDENT WITH INVESTMENT SCHEME THAT WAS AN AFFINITY FRAUD. THE COMMISSION ALLEGED THAT BY EMPLOYING SOLICITATIONS APPEALING TO THE CHRISTIAN FAITH OF MANY INVESTORS, RESPONDENT SUCCEEDED IN RAISING OVER $120 MILLION FROM INVESTORS IN CHURCH BONDS (BONDHOLDERS) AND OVER $50 MILLION FROM INVESTORS IN THE BOND FUNDS THROUGH THEIR CONTROL RESPONDENT ALLEGEDLY MISUSED FUNDS THAT CHURCHES PAID TO THE PAYING AGENTS TO BE HELD IN TRUST FOR THE BENEFIT OF BONDHOLDERS, MISUSED BOND FUND INVESTOR PROCEEDS, AND MISREPRESENTED THE RATES OF RETURN OF THE BOND FUNDS; DIVERTED $8 MILLION WORTH OF CHURCH FUNDS HELD IN TRUST FOR THE REPAYMENT OF BONDHOLDERS INTO AN ONLINE BROKERAGE ACCOUNT. RESPONDENT ALLEGEDLY USED THOSE FUNDS TO TRADE STOCK AND EQUITY OPTIONS, LOAN MONEY TO AT LEAST ONE CHURCH AND TO MAKE UNSECURED LOANS TO THEMSELVES AND COMPANIES THEY CONTROLLED; CAUSED THE BOND FUNDS TO LOAN INVESTOR PROCEEDS TO OTHER BOND FUNDS, AND TRANSFERRED ALMOST $5 MILLION WORTH OF BOND FUND INVESTOR PROCEEDS TO THEIR COMPANIES.
- Resolution: Judgment Rendered
- Sanction Details :: Sanctions: Monetary/Fine
- Sanction Details :: Amount: $120,000.00 Sanctions: Disgorgement/Restitution Sanctions: Cease and Desist/Injunction
- Sanction Details: ON JULY 26, 2005, THE COMMISSION OBTAINED AN ORDER OF PERMANENT INJUNCTION AND FREEZE OF ASSETS, PENDING THE RESOLUTION OF THE APPROPRIATE AMOUNT OF DISGORGEMENT AND CIVIL PENALTIES, REQUIRES DEFENDANT TO GIVE AN ACCOUNTING, PROHIBITS DOCUMENT DESTRUCTION, PERMITS EXPEDITED DISCOVERY, COMPLY WITH UNDERTAKING. DEFENDANT CONSENTED TO THE ENTRY OF PERMANENT INJUNCTION AND OTHER RELIEF WITHOUT ADMITTING OR DENYING THE ALLEGATIONS. SEC LITIGATION RELEASE 20629, JUNE 25, 2008: ON MAY 19, 2008, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA ENTERED FINAL JUDGMENT AGAINST REEVES. THE FINAL JUDGMENT ENTERED BY THE COURT: (1) PERMANENTLY ENJOIN REEVES FROM VIOLATING SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934, AND RULE 10B-5 PROMULGATED THEREUNDER, AND SECTION 17(A) OF THE SECURITIES ACT OF 1933; ORDER VAUGHN REEVES TO PAY DISGORGEMENT, PLUS PREJUDGMENT INTEREST, IN THE AMOUNT OF $3,515,396; AND ORDER REEVES TO PAY A $120,000 CIVIL PENALTY.
DISCLOSURE 4 –
- Event Date: 11/4/1993
- Disclosure Type: Regulatory
- Disclosure Resolution: Final
- Disclosure Detail :: DocketNumberFDA: C8A930080
- DocketNumberAAO: 8930080
- Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.
- Resolution: Acceptance, Waiver & Consent(AWC)
- Sanction Details :: Sanctions: Monetary/Fine
- Sanction Details :: Amount: $5,000.00 Sanctions: Censure
- Broker Comment: THE ERRORS IN OUR ACCOUNTING WERE DUE TO MISTAKES MADE WITHIN OUR RECORDS AND CHANGING TO A NEW ACCOUNTING COMPUTER SOFTWARE. THE EMPLOYEE PREVIOUSLY RESPONSIBLE FOR THE FIRM’S BOOKKEEPING HAS BEEN REASSIGNED. WE HAVE ENGAGED A CERTIFIED PUBLIC ACCOUNTANT TO ASSIST US EACH MONTH WITH ALL BOOKS AND RECORDS. A NEW COMPUTER SOFTWARE HAS BEEN IMPLEMENTED THAT DOES NOT ALLOW ANY CHANGE WITHIN OUR SYSTEM WITHOUT CREATING AN AUDIT TRAIL. THREE ADDITIONAL EMPLOYEES HAVE BEEN ASSIGNED TO ASSIST IN MAINTAINING FINANCIAL BOOKS AND RECORDS. WE HAVE APPOINTED AN EMPLOYEE TO ASSUME THE RESPONSIBILITIES OF FINANCIAL AND OPERATIONS PRINCIPAL EFFECTIVE OCTOBER 1, 1993.
According to a study prepared for the FINRA Investor Education Foundation, 80 percent of American investors report that they have been solicited to participate in a fraud scheme, while 11 percent of American investors report that they personally lost money as a result of fraud.
FINRA notes that the rate of investment fraud is most likely much higher than it is reported. This is because many victims of financial advisor scams are too ashamed to come forward. Further, the study also found that a significant number of investors do not know how to spot common red flags of investment fraud. The least you should do is share your experience with other potential victims of investment scams.
Under federal securities law and securities industry regulations, registered investment firms have a legal duty to supervise their financial advisors. Section 15(b)(4)(E) of the Securities and Exchange Act of 1934 makes a securities firm liable for the conduct of representatives.
- ALANAR INCORPORATED (CRD#: 23225) :: 11/28/1988 – 7/8/2005 :: SULLIVAN, IN
- AMI SECURITIES, INC. (CRD#: 13412) :: 2/12/1986 – 9/12/1988
- SHARE, INCORPORATED (CRD#: 11226) :: 8/25/1983 – 3/7/1986
The duty to supervise securities representatives is a strong legal requirement. Registered investment firms must take many different steps to ensure that they are protecting their customers from irresponsible and criminal financial advisors.
Legit or Not?
Unfortunately, stockbroker fraud is more common than many investors would like to think. And yes, stockbrokers (including Vaughn Alan Reeves, but not limited to) can (and do) steal money from their clients. While it’s rare that a broker will literally steal his client’s money (though that does happen), typically the “theft” of investment funds comes in the form of other fraudulent violations of securities law and FINRA rules which leads to significant investment losses.
Investors generally understand that there are risks associated with buying and selling securities. The market can go up, and the market can go down. No matter how skilled of an investor you are, there are always risks. With that being said, sometimes investment losses cannot be blamed on simple back luck.
There are 10 major types of complaints we receive against Investment Brokers –
- Outright Theft (Conversion of Funds)
- Unauthorized Trading
- Misrepresentation or Omission of Material Facts
- Excessive Trading (Churning)
- Lack of Diversification
- Unsuitable Investment Recommendations
- Failure to Disclose a Personal Conflict of Interest
- Front Running of Transactions
- Breakpoint Sale Violations
- Negligent Portfolio Management
Do your due diligence before investing. Public records are available for everybody to review and decide on the safest bet.
How to Protect Yourself
We, as citizens, place a great deal of trust in the financial advisors who are tasked with helping us achieve and maintain financial security. Most of the time financial advisors and stockbrokers are honest folks who work diligently in their client’s best interests. However, on occasion financial advisors and the brokerage firms who employ them mess up and cause serious financial harm to their clients. Sometimes these losses are caused by simple negligence. Other times fraud or other serious misconduct is to blame.
Here are 5 signs that your broker needs to be reported –
- Breach of Fiduciary Duty: Under the Investment Advisers Act of 1940, certain investment professionals, known as registered investment advisors (RIAs), owe fiduciary obligations to their customers. Your investment broker must always look out for your best interests. If you lost money because of your broker’s breach of fiduciary duty, you may be entitled to compensation for the full value of your damages.
- Unsuitable Investments: Many financial advisors are not fiduciaries. Instead, they are held to the suitability standard. These stockbrokers and financial advisors can only sell and recommend financial products that are appropriate for a customer’s unique investment profile. If you lost money in unsuitable investments, you should consider reporting them.
- Material Misrepresentations or Omissions: Brokers have a duty to make fair and honest representations to their clients. If they fail to do so, and an investor loses money due to a misrepresentation or a material omission, the broker may be liable for the investor’s losses.
- Lack of Diversification: Brokers must also act with the appropriate level of professional skill. Pushing a customer into over-concentrated investments is highly risky. Brokers can be held liable for losses sustained because of an investor’s inappropriate lack of diversification.
- Excessive Trading (Churning): Stockbrokers and financial advisors must have a well-grounded, reasonable basis to execute all trades. Unfortunately, there are cases in which brokers will frequently trade on a customer’s account, simply to increase their own fees. This unlawful practice is known as churning.
- Unauthorized Trading: Brokers must have the proper legal authority to make transactions on behalf of a client. If you lost money because your broker made trades that you never approved of, you may have been the victim of unauthorized trading. You should consult with an experienced attorney.
Report Vaughn Reeves
In order to prevail in an investment fraud lawsuit or FINRA arbitration cases, you must be able to assert a viable ‘cause of action’.
Vaughn Alan Reeves – and the firm that employs this broker – is regulated by the Financial Industry Regulatory Authority (FINRA). FINRA provides an online form to allow investors to file a formal complaint against their financial advisor, stockbroker, or brokerage firm.
Click here to go to FINRA’s Online Complaint Form →
This form will ask you for specific information related to your complaint. Be prepared by gathering the following:
- Name and symbol for the investment product in question.
- The CRD number (1194419) for the broker – Vaughn Alan Reeves
- Your complete contact information.
Remember, it is advised to report your broker to FINRA, only after you have exhausted all of your other remedies and carefully prepared a compelling complaint. Once you file a complaint against your broker at FINRA, your case will be bound by FINRA’s rules and the arbitration panel’s eventual decision. The time clock will start, and your complaint will be served on your broker or broker-dealer.
The views and opinions expressed in these articles are those of the source BrokerComplaints.com and do not necessarily reflect the official position of ‘The Skeptic Files,’ which shall not be held liable for any inaccuracies presented. The information provided within this article is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability of the information in this article for any purpose.
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