On June 2, 2021, FINRA’s National Adjudicatory Council modified a FINRA’s Office of Hearing Officers decision from 2019 that was filed by FINRA’s Department of Enforcement against Titan Securities, Brad Brooks, and broker Richard Demetriou. The modified order has resulted in a one-year suspension of Titan Securities’ CEO and owner Mr. Brooks.
The enforcement action arose out of alleged misconduct of Mr. Demetriou’s involvement with a private placement of preferred units in a limited partnership, RBCP Preferred, LLC (“RBCP”). RBCP was organized by the owner of Mr. Demetriou’s previous member firm, who employed Mr. Demetriou to solicit investments from Mr. Demetriou’s previous firm, and Mr. Demetrious represented that RBCP was offered to them as a means of recouping those losses. Mr. Demetriou recommended RBCP, made misrepresentations concerning the supposed collateral securing the investments, and told customers that an investment of 10 percent of their previous losses would result in recovery of their lost investments, plus a profit – alleged returns of more than 1,000 percent. The investors did not recoup their losses but instead lost an additional $337,000 when RBCP failed, and the alleged collateral was not foreclosed.
FINRA’s National Adjudicatory Council made the following findings:
- Demetriou made material misrepresentations to customers about RBCP in violation of FINRA Rule 2010.
- Demetriou engaged in an undisclosed, unapproved outside business activity with respect to RBCP, in violation of NASD Rule 3030 and FINRA Rule 2010.
- Demetriou violated FINRA rules by communicating with customers using personal email accounts.
- Demetriou also violated FINRA rules by sending emails concerning RBCP and consolidated financial statements that he created (which included RBCP and other investments) to customers, which violated FINRA’s advertising and communications with the public standards.
- Titan Securities and Brad Brooks failed to supervise Mr. Demetriou’s outside business activities. During a supervisory email review, Brad Brooks, Titan Securities’ principal, and Mr. Demetriou’s supervisor became aware of Mr. Demetriou’s involvement with RBCP. Despite learning of numerous red flags—including that RBCP promised returns of more than 1,000 percent, that the customers’ investments would be repaid in a few months and were secured by rare coins, and that Mr. Demetriou was facilitating contact between RBCP and investors—Brooks failed to conduct a reasonable inquiry and, as a result, Brooks and Titan Securities failed to supervise Mr. Demetriou’s RBCP outside business activity. Titan Securities’ and Brooks’ failures resulted in significant losses to investors.
- Brooks and Titan Securities were also aware that Mr. Demetriou and other Titan Securities registered representatives were using personal email to conduct securities business with customers but allowed this to continue for years.
- In connection with a contingency offering, Titan Securities willfully violated Exchange Act Section 15(c), Exchange Act Rule 15c2-4, and FINRA Rule 2010. Additionally, Titan and Brooks willfully violated Exchange Act Section 10(b), Exchange Act Rule 10b-9, and FINRA Rule 2010.
As a result of Mr. Demetrious’s misconduct, he has been barred from the securities industry and ordered to pay restitution in the amount of $337,000 to his former customers. Fines of $163,000 were also assessed but not imposed as a result of Mr. Demetriou being expelled from the industry.
For failing to supervise Mr. Demetrious, Titan Securities and Mr. Brooks were fined $50,000, jointly, and severally. Mr. Brooks was also suspended from holding any principal or supervisory capacities for one year.
For willfully violating Exchange Act Section 17 and Exchange Act Rule 17a-4, and Titan and Brooks violated NASD Rules 3110 and 3010 and FINRA Rules 4511 and 2010, Titan Securities is subject to statutory disqualification.
Finally, in connection with a contingency offering violations, Titan Securities and Mr. Brooks were fined $50,000, jointly, and severally, and Mr. Brooks was suspended for one year in all principal and supervisory capacities. Before he can return in a principal capacity, Mr. Brooks must requalify by passing the appropriate examination. Both Titan Securities and Mr. Brooks are also subject to stator disqualification as a result of these willful violations.
Titan Securities (CRD No. 131392)
Titan Securities has been a FINRA member since 2004 and is headquartered in Addison, Texas. From 2009 through 2012, when the relevant conduct occurred, Titan Securities grew from eight to 25 registered representatives. Titan Securities’ primary line of business was private placement securities offerings, from which it derived approximately 80 percent of its gross revenue.
CEO and Owner Brad Brooks (CRD No. 1584633)
Mr. Brooks joined the securities industry in 1986 and has 34 years of experience in the industry. Mr. Brooks is the sole owner, chief executive officer (CEO), and president of Titan Securities. For the relevant period, Mr. Brooks was also Titan Securities’ chief compliance officer (COO) and Mr. Demetriou’s direct supervisor.
According to his public disclosure report with FINRA, Mr. Brooks has been the subject of at least six customer complaints that have resulted in either a monetary settlement or an arbitration award for the customer.
Financial Advisor Richard Demetriou (CRD No. 828433)
Mr. Demetriou, a veteran broker, joined the securities industry in 1976. Over the span of his 40+ year career, Mr. Demetrious has been associated with eight different brokerage firms. He joined Titan in April 2009. During his time with Titan Securities, Mr. Demetriou worked from his home in Georgia.
According to his public disclosure report with FIRNA, Mr. Brooks has been the subject of at least two customer complaints that have resulted in a monetary settlement.
How to Recover Losses or Obtain a Free Consultation
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.
If you have lost money with Titan Securities, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com, or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.