The Financial Industry Regulatory Authority (FINRA) has filed a complaint against Kimberly Springsteen-Abbott, owner, chief executive and head of compliance for Commonwealth Capital Securities Corp., for allegedly misusing investors’ money to pay for personal expenses, including home improvements, trips, meals, holiday decorations and tools.
Initially reported May 14 in a story by Investment News, FINRA’s complaint says Springsteen-Abbott allegedly misused $345,000 in investors’ funds between December 2008 and February 2012. FINRA also says Springsteen-Abbot allegedly was involved in falsifying and backdating a memo accounting for “Disney Tickets” that was given to FINRA staff members while they were conducting an exam in 2011.
Commonwealth Capital Securities, which packages and distributes illiquid equipment-leasing funds, is the broker/dealer of Commonwealth Capital Corp. It employs about 22 registered reps and is involved in private placements and direct investments.
FINRA’s complaint goes on to state that the broker/dealer has distributed 13 different equipment-leasing funds from 1993 to the present, raising more than $240 million. Each fund acquires equipment involving information technology, medical technology, telecommunications and other categories; proceeds from the offerings are invested primarily in equipment that is subject to operating leases with durations of 12 to 36 months.
“Ms. Springsteen-Abbott “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,” FINRA’s complaint reads.
The complaint includes 27 pages of alleged purchases from Springsteen-Abbott and other company executives. Among the purchases listed: $63.43 for a meal at a Hooter’s restaurant in 2009; $1,971.11 for a family vacation in 2010 that included Ms. Springsteen-Abbott’s husband, daughter, ex-son-in-law and two grandchildren at the Animal Kingdom Lodge in Orlando, Fla.; and $12,414 for a board of directors meeting, also in 2010, at the Princeville St. Regis Hotel in Kauai, Hawaii.
This isn’t the first time Commonwealth Capital has faced the scrutiny of regulators. In 2012, a sexual discrimination suit was filed by a former Commonwealth Capital employee, Shannon Givler, who previously contacted the Securities and Exchange Commission (SEC) in 2010 as a whistleblower. In that complaint, Givler accused Springsteen-Abbott and other company executives of “misrepresenting investor return rates and misappropriating investor funds for lavish personal expenses.”