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Florida Office of Financial Regulation Sues Prime Capital Services, Inc. and Asset & Financial Planning, Ltd.

The Florida Attorney General has initiated a lawsuit on behalf of the Florida Office of Financial Regulation (“FLOFR”) against brokerage firm Prime Capital Services, Inc., headquartered in Poughkeepsie, New York, and Florida-based investment adviser, Asset & Financial Planning, Ltd. Several brokers and investment advisers associated with both firms, Scott Aabel, Antonio Gomes and Richard Caparelli, are also named in the Complaint filed Tuesday in Sarasota County Circuit Court. An Administrative Complaint was filed by FLOFR in April 2012 against the same defendants.

FLOFR alleged that the named firms and brokers violated the Florida Securities and Investor Protection Act, Chapter 517, Florida Statutes, with regard to certain variable annuity customers. FLOFR alleged that the defendants violated the Florida Securities and Investor Protection Act through fraud, failure to observe high standards of commercial honor and principles of trade, and failure to supervise. FLOFR’s allegations stem from its examination which revealed that the defendants failed to fully advise customers that management fees withdrawn from their variable annuities would negatively impact the annuities’ benefit riders.

According to the Complaint, the benefit riders contained guarantees that the principal would be insulated against losses in the stock market, and guaranteed the payment of annual bonuses, if certain conditions were met. FLOFR alleges that the customers’ annuity benefits were negatively impacted because the direct withdrawal of the management fees from the variable annuities voided or violated the terms and conditions of the benefit riders.

In the Complaint, FLOFR is seeking restitution for customers who were adversely affected by the defendants’ actions as well as fines, and the suspension or revocations of the firms’ and brokers’ registrations.

The Florida securities lawyers at McCabe Rabin, P.A. represent investors nationwide in FINRA arbitration matters. Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

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