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Home > Investor News > Pinnacle Partners, Brian Alfaro Suspended By FINRA

Pinnacle Partners, Brian Alfaro Suspended By FINRA

On Dec. 3, 2010, the Financial Industry Regulatory Authority (FINRA) filed a complaint against Pinnacle Partners Financial Corp. and its president and owner, Brian K. Alfaro. In the complaint, FINRA accused Alfaro and Pinnacle of operating a “boiler room” in which thousands of cold calls were placed weekly to solicit investments in oil- and gas-drilling joint ventures. Eventually more than $10 million was raised from 100-plus investors for offerings that allegedly “materially misrepresented or omitted certain facts,” FINRA alleges. FINRA further stated that Alfaro diverted some of the customer funds for unrelated business and personal expenses.

On April 19, FINRA announced that it had suspended Pinnacle and Alfaro for allegedly continuing to sell fraudulent oil and gas private placements even after FINRA had enacted a temporary cease-and-desist order.

Pinnacle continued to “market oil and gas offerings through material misrepresentations, with the intent to deceive investors,” said Brad Bennett, executive vice president and chief of enforcement of FINRA, in a statement.

“Brian Alfaro and Pinnacle pose a serious risk to the investing public,” Bennett added.

As reported April 20 by Investment News, Alfaro had withdrawn Pinnacle’s broker/dealer license in February. Up until that point, more than $700,000 had been spent on legal fees related to FINRA’s investigation.

In the Investment News article, Alfaro questioned the regulator’s actions to suspend a firm that is not a member of FINRA. FINRA maintains that it can continue to pursue any firm that has withdrawn its license because regulatory rules allow FINRA to retain jurisdiction for two years in order to prevent firms from avoiding sanctions by withdrawing their broker/dealer registrations.

According to Alfaro, Pinnacle is not marketing and selling securities. Rather it’s selling private placements via Alfaro’s investment company, Alfaro Oil & Gas LLC.

Pinnacle and Mr. Alfaro “deliberately attempted to mislead investors by deleting unfavorable information from well operator reports and providing them with doctored maps, which omitted numerous dry, plugged or abandoned wells near their projected drilling sites,” FINRA says. The complaint goes on to allege that in one instance, Alfaro collected more than $500,000 for a well that was never drilled and used those funds for unrelated personal and business expenses.

A hearing is scheduled for Sept. 12.


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