Robert Brian Kay Barred for Misrepresenting Values of Phony Securities
Posted on Sep 28, 2013 3:59pm PDT
FINRA barred West America Securities Corp. President, CEO and CCO Robert Brian Kay for failing to comply with his firm's policies for safekeeping customer securities and representing these properties were highly valuable, reliable and secure, even though he allegedly knew some had been implicated in fraudulent schemes; the actual value of several of these securities was zero, in some instances multiple billion dollars less than Kay claimed they were worth.
Disciplinary Proceeding #2010021286901
The findings state that in 2007, Kay received 60 Brazilian bearer bond certificates with a purported face value of $879 million and deposited these into a safe deposit box at a local bank.
Believing that he would be "handsomely compensated" for holding the bonds, Kay corresponded with the bonds' owner, attesting to the validity of the securities and that they were "freely transferable…good and legitimately earned assets," even though Kay himself allegedly did not verify the true nature of the funds.
When the individual's assistant proposed changes to Kay's Letter of Attestation, he provided additional letters on West America firm letterhead, again allegedly failing to verify the bond's value.
According to FINRA, the bearer bonds Kay attested were worth $879 million were in fact of "no value." Furthermore, the investigation states that the bonds have not been redeemable since 1996 and are not negotiable.
In 2008, Kay allegedly accepted four Series 57 Japanese Government Debt Bonds, purportedly worth nearly $23 billion. Though Kay allegedly had never heard of the Series 57 Japanese bonds, he nonetheless attested the bonds were "good and legitimately earned assets, being free and clear of any encumbrances."
In 2010, Kay prepared a cover letter addressed to Wells Fargo Investments on behalf of the Series 57 Japanese bond owners, again falsely verifying and attesting to the validity of the bonds.
After Wells Fargo refused to accept deposit, Kay returned all but one bond and was forced to surrender the remaining Series 57 bond in the 2011 lawsuit Trinity Capital Investment Foundation v. Changing the Planet LLC et al. Named in a May 2011 Amended Complaint, FINRA charged Kay with failing to timely disclose his involvement in the litigation.
The complaint alleged Kay's involvement in securities fraud, fraudulent misrepresentation, negligent misrepresentation, civil conspiracy, breach of fiduciary duty and Concert of Action.
Historically, Kay was suspended fined over $50,000 in 2001 for violating FINRA's rules related to sales of penny stocks. In 1999, Kay and a few associates were ordered to pay over $135,000 for violations of the Florida Securities Investors Protection Act, also related to penny stock supervisory violations. In 1997,
Prior to West America in Las Vegas, Kay was associated with J. Alexander Securities, Inc. in Los Angeles, California.
If you have invested with Robert Brian Kay or with any broker or firm whose false or fraudulent misrepresentation of bonds, securities or other instruments has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
Categories: Securities Fraud, Discipline, FINRA |
