Gurpreet Chandhoke Sued by FINRA Over Private Securities Transactions

Gurpreet Chandhoke and Stephen Shea Sued by FINRA

In a complaint filed by FINRA, and reported in October, 2019 Gurpreet Chandhoke and Stephen Shea, of Walnut Creek, California were named as Respondents alleging that they failed to disclose outside business activities and engaged in private securities transactions in violation of FINRA rules.  .

The complaint alleges that Chandhoke and Shea created securities offering materials and gave them to prospective investors in order to solicit their interest in investments.  At least three companies were created by Chandhoke for the means of engaging in securities transactions without disclosing the full extent of the outside business to his broker dealer.  Also in violation of FINRA rules, Chandhoke and Shea opened accounts at other broker dealers and failed to disclose these accounts to the member firms.  The complaint further alleges that Chandhoke and Shea engaged in nearly ten million dollars of private securities transactions without providing written notice of those transactions to their firms prior to the sales.

The claim filed by FINRA is not final, and until the allegations have been proven in a court of law, no adverse inferences should be drawn.

Gurpreet Chandhoke’s registration and disciplinary history

In order to lawfully sell investments to the public, one must either be registered or exempt from registration. Gurpreet Chandhoke was previously registered as a registered representative with Arete Wealth Management and Penserra Securities, and is currently registered as an investment advisor with VII Peaks Capital LLC.

According to FINRA’s CRD disclosure report, Gurpreet Chandhoke has been the subject of one regulatory investigation.

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.