SEC Bars Edward Borg Over Natural Alternatives Trades

On September 30, 2015 the Securities and Exchange announced that Edward Borg submitted an Offer of Settlement. Solely for the purpose of the SEC’s proceedings and without admitting or denying the findings herein, Edward Borg consented to the findings that he periodically manipulated the market for Natural Alternatives International, Inc.’s (“NAII”) common stock between 2003 through 2011.

Edward Borg engaged in manipulative trading to support the price of NAII stock and to give the false appearance of investor interest. He directed trading in several of his customers’ accounts, personally invested heavily in NAII and had several of his customers invest heavily in NAII, often in high concentrations (more than 90% of the account’s total value) and frequently on margin.

In connection with one All Funds customer, Borg recommended that she invest in NAII almost exclusively, which was not suitable in light of her investment objectives. During this period, Borg personally owned as much as 22.5 percent of NAII’s outstanding stock, and customers at All Funds, combined with Borg’s personal holdings, owned as much as 55 percent of the outstanding shares of NAII.

Edward Borg did not report any of his holdings as required by the federal securities laws until March 9, 2012, when he filed a Schedule 13G, and Forms 3 and 4—all of which understated the number of shares he beneficially owned.

Borg made cross-trades and matched trades in thinly-traded NAII stock at prices and also executed numerous wash sales and matched orders, which distorted the trading volume for NAII, supported the price of NAII, and made the stock appear to be more liquid than it really was.

Edward Borg’s registration and disciplinary history

In order to lawfully sell investments to the public, one must either be registered or exempt from registration.

Edward Borg was registered with:

09/2011 – 05/2012

LPL FINANCIAL LLC (CRD# 6413) – MONROE, NY

12/1974 – 02/2012

ALL FUNDS, INC. (CRD# 23) – MONROE, NY

According to FINRA’s CRD disclosure report, Edward Borg has been the subject of two regulatory investigations.

The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 23 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions. During that time we have recovered money for over one thousand individuals, pension plans, trusts and companies. The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $40,000,000.

When investors contact our firm they can expect prompt attention, and a detailed analysis of their issues. Typical claims that we are asked to review involve “unsuitability (where a financial advisor makes investment recommendations that are inconsistent with a customer’s investment objectives), claims for “churning” (where a broker enters into an excessive number of trades for the purpose of generating commissions), claims involving illiquid investments such as private placements (I.e., real estate investment trusts, limited partnerships, equipment leasing and oil and gas drilling programs) as well as claims for violations of state securities laws, which often provide investors remedies like attorney’s fees and interest, if they are successful on the claim.

Since a Supreme Court ruling in the 1980s, most investment related disputes between brokerage firms and their customers have been filed in an arbitration forum hosted by FINRA Dispute Resolution. FINRA, along with the SEC, serves as a securities industry “watchdog” and regulator. Most brokerage firms require their clients to sign binding arbitration agreements, mandating that any disputes between them be arbitrated at FINRA.

Investors pursuing claims at FINRA typically advance claims related to suitability. FINRA rules require that all registered representatives make suitable investment recommendations to their clients. Other claims are based on negligence or breach of fiduciary duty, while another category includes claims based on misrepresentations and fraud. Most claims filed with FINRA are resolved within 15 months, and oftentimes, the cases are resolved via settlement or mediation in under a year.

FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).

If you suspect that you have been the victim of investment fraud, or had a financial advisor recommend unsuitable investments to you, call us today for a free, confidential consultation at (702) 380-3131.