Federico R. Buenrostro – and the firm that employs him or her – is regulated by the Financial Industry Regulatory Authority (FINRA).
If you are like most people, before you go out to dinner at a new restaurant, you probably take a quick look at the reviews. This makes sense; you are going to pay for an expensive dinner, and you need to be sure that you are getting a good value.
Yet, when choosing a financial advisor, many people fail to conduct this same level of due diligence. Before turning over access to your money, you need to be sure that you have found a financial advisor that you can trust. Here, our audit report, including details of allegations, complaints, and sanctions will help you decide whether or not to invest with Federico R. Buenrostro.
BrokerComplaints.com is currently investigating allegations related to Federico R. Buenrostro. We provide a free platform for investors to help them in their claims against negligent brokers and brokerage firms.
About Federico Buenrostro
Federico R. Buenrostro is an Investment Adviser. Federico R. Buenrostro’s Central Registration Depository (CRD) number is 5679397 and the FINRA Profile can be found at – https://brokercheck.finra.org/individual/summary/5679397.
Click here to download a Detailed Audit Report for Federico R. Buenrostro.
Federico R. Buenrostro has previously been reprimanded and has disclosures and/or client dispute(s) listed at FINRA BrokerCheck.
Accusations and Disclosures
You can find below, a quick snapshot of Federico R. Buenrostro’s regulatory actions, arbitrations, and complaints.
DISCLOSURE 1 –
- Event Date: 4/23/2012
- Disclosure Type: Civil
- Resolution: Final
- Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Allegations: SEC LITIGATION RELEASE 22342, APRIL 23, 2012: THE SECURITIES AND EXCHANGE COMMISSION CHARGED FEDERICO R. BUENROSTRO, THE FORMER CEO OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CALPERS), AND HIS CLOSE PERSONAL FRIEND WITH SCHEMING TO DEFRAUD AN INVESTMENT FIRM INTO PAYING $20 MILLION IN FEES TO THE FRIEND’S PLACEMENT AGENT FIRMS. THE DEFENDANT VIOLATED SECTION 17(A)(1) OF THE SECURITIES ACT OF 1933 AND SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULES 10B-5(A) AND 10B-5(C). THE SEC ALLEGES THAT FORMER CALPERS CEO FEDERICO R. BUENROSTRO AND HIS FRIEND FABRICATED DOCUMENTS GIVEN TO A NEW YORK-BASED PRIVATE EQUITY FIRM. THOSE DOCUMENTS GAVE THE FIRM THE FALSE IMPRESSION THAT CALPERS HAD REVIEWED AND SIGNED PLACEMENT AGENT FEE DISCLOSURE LETTERS IN ACCORDANCE WITH ITS ESTABLISHED PROCEDURES. IN FACT, BUENROSTRO AND HIS FRIEND INTENTIONALLY BYPASSED THOSE PROCEDURES TO INDUCE THE PRIVATE EQUITY FIRM TO PAY PLACEMENT AGENT FEES TO THE FRIEND’S FIRMS. THE FALSE LETTERS BEARING A FAKE CALPERS LOGO AND BUENROSTRO’S SIGNATURE WERE PROVIDED TO THE PRIVATE EQUITY FIRM, WHICH THEN WENT AHEAD WITH THE PAYMENTS. ACCORDING TO THE SEC’S COMPLAINT, THE PRIVATE EQUITY FIRM BEGAN REQUIRING SIGNED INVESTOR DISCLOSURE LETTERS IN 2007 FROM INVESTORS SUCH AS CALPERS BEFORE IT WOULD PAY FEES TO A PLACEMENT AGENT THAT ASSISTED IN RAISING FUNDS. THE FRIEND’S FIRM AGREED TO THIS CONTRACTUAL PROVISION IN A PLACEMENT AGENT AGREEMENT WITH THE PRIVATE EQUITY FIRM RELATED TO CALPERS’ INVESTMENT IN THE PRIVATE EQUITY FIRM’S PRODUCT. HOWEVER, WHEN THE FRIEND’S FIRM REQUESTED AN INVESTOR DISCLOSURE LETTER FROM CALPERS’ INVESTMENT OFFICE TO PROVIDE THE PRIVATE EQUITY FIRM, IT WAS INFORMED THAT CALPERS’ LEGAL OFFICE HAD ADVISED IT NOT TO SIGN A DISCLOSURE LETTER. THE FRIEND’S FIRM NEVER AGAIN CONTACTED CALPERS’ INVESTMENT OFFICE FOR AN INVESTOR DISCLOSURE LETTER. THE SEC ALLEGES THAT IN JANUARY 2008, THE FRIEND INSTEAD FABRICATED A LETTER USING A PHONY CALPERS LOGO. AT THE FRIEND’S REQUEST, BUENROSTRO THEN SIGNED WHAT APPEARED TO BE A CALPERS DISCLOSURE LETTER. UPON RECEIPT OF THE FAKE DISCLOSURE LETTER FOR THE FINANCIAL PRODUCT, THE PRIVATE EQUITY FIRM PAID THE FRIEND’S FIRM ABOUT $3.5 MILLION IN PLACEMENT AGENT FEES. THE SEC’S COMPLAINT FURTHER ALLEGES THAT LESS THAN TWO WEEKS LATER, THE FRIEND AND BUENROSTRO CREATED FALSE CALPERS DISCLOSURE LETTERS FOR AT LEAST FOUR MORE FUNDS OF THE PRIVATE EQUITY FIRM UNDER SIMILARLY SUSPICIOUS CIRCUMSTANCES. AS PART OF THE SCHEME, BUENROSTRO SIGNED BLANK SHEETS OF FAKE CALPERS LETTERHEAD THAT HIS FRIEND AND THE FRIEND’S FIRM THEN USED TO GENERATE ADDITIONAL INVESTOR DISCLOSURE LETTERS AS THEY NEEDED THEM. BASED ON THESE FALSE DOCUMENTS, THE EQUITY FIRM WAS INDUCED TO PAY THE FRIEND’S FIRM MORE THAN $20 MILLION IN PLACEMENT AGENT FEES IT WOULD NOT HAVE PAID WITHOUT THE DISCLOSURE LETTERS.
- Resolution: Judgment Rendered |Sanctions: Injunction
According to a study prepared for the FINRA Investor Education Foundation, 80 percent of American investors report that they have been solicited to participate in a fraud scheme, while 11 percent of American investors report that they personally lost money as a result of fraud.
FINRA notes that the rate of investment fraud is most likely much higher than it is reported. This is because many victims of financial advisor scams are too ashamed to come forward. Further, the study also found that a significant number of investors do not know how to spot common red flags of investment fraud. The least you should do is share your experience with other potential victims of investment scams.
Under federal securities law and securities industry regulations, registered investment firms have a legal duty to supervise their financial advisors. Section 15(b)(4)(E) of the Securities and Exchange Act of 1934 makes a securities firm liable for the conduct of representatives.
- ARVCO FINANCIAL VENTURES, LLC (CRD#: 148204) :: 8/12/2009 – 4/29/2011 :: STATELINE, NV
The duty to supervise securities representatives is a strong legal requirement. Registered investment firms must take many different steps to ensure that they are protecting their customers from irresponsible and criminal financial advisors.
Legit or Not?
Unfortunately, stockbroker fraud is more common than many investors would like to think. And yes, stockbrokers (including Federico R. Buenrostro, but not limited to) can (and do) steal money from their clients. While it’s rare that a broker will literally steal his client’s money (though that does happen), typically the “theft” of investment funds comes in the form of other fraudulent violations of securities law and FINRA rules which leads to significant investment losses.
Investors generally understand that there are risks associated with buying and selling securities. The market can go up, and the market can go down. No matter how skilled of an investor you are, there are always risks. With that being said, sometimes investment losses cannot be blamed on simple back luck.
There are 10 major types of complaints we receive against Investment Brokers –
- Outright Theft (Conversion of Funds)
- Unauthorized Trading
- Misrepresentation or Omission of Material Facts
- Excessive Trading (Churning)
- Lack of Diversification
- Unsuitable Investment Recommendations
- Failure to Disclose a Personal Conflict of Interest
- Front Running of Transactions
- Breakpoint Sale Violations
- Negligent Portfolio Management
Do your due diligence before investing. Public records are available for everybody to review and decide on the safest bet.
How to Protect Yourself
We, as citizens, place a great deal of trust in the financial advisors who are tasked with helping us achieve and maintain financial security. Most of the time financial advisors and stockbrokers are honest folks who work diligently in their client’s best interests. However, on occasion financial advisors and the brokerage firms who employ them mess up and cause serious financial harm to their clients. Sometimes these losses are caused by simple negligence. Other times fraud or other serious misconduct is to blame.
Here are 5 signs that your broker needs to be reported –
- Breach of Fiduciary Duty: Under the Investment Advisers Act of 1940, certain investment professionals, known as registered investment advisors (RIAs), owe fiduciary obligations to their customers. Your investment broker must always look out for your best interests. If you lost money because of your broker’s breach of fiduciary duty, you may be entitled to compensation for the full value of your damages.
- Unsuitable Investments: Many financial advisors are not fiduciaries. Instead, they are held to the suitability standard. These stockbrokers and financial advisors can only sell and recommend financial products that are appropriate for a customer’s unique investment profile. If you lost money in unsuitable investments, you should consider reporting them.
- Material Misrepresentations or Omissions: Brokers have a duty to make fair and honest representations to their clients. If they fail to do so, and an investor loses money due to a misrepresentation or a material omission, the broker may be liable for the investor’s losses.
- Lack of Diversification: Brokers must also act with the appropriate level of professional skill. Pushing a customer into over-concentrated investments is highly risky. Brokers can be held liable for losses sustained because of an investor’s inappropriate lack of diversification.
- Excessive Trading (Churning): Stockbrokers and financial advisors must have a well-grounded, reasonable basis to execute all trades. Unfortunately, there are cases in which brokers will frequently trade on a customer’s account, simply to increase their own fees. This unlawful practice is known as churning.
- Unauthorized Trading: Brokers must have the proper legal authority to make transactions on behalf of a client. If you lost money because your broker made trades that you never approved of, you may have been the victim of unauthorized trading. You should consult with an experienced attorney.
Report Federico Buenrostro
In order to prevail in an investment fraud lawsuit or FINRA arbitration cases, you must be able to assert a viable ‘cause of action’.
Federico R. Buenrostro – and the firm that employs this broker – is regulated by the Financial Industry Regulatory Authority (FINRA). FINRA provides an online form to allow investors to file a formal complaint against their financial advisor, stockbroker, or brokerage firm.
Click here to go to FINRA’s Online Complaint Form →
This form will ask you for specific information related to your complaint. Be prepared by gathering the following:
- Name and symbol for the investment product in question.
- The CRD number (5679397) for the broker – Federico R. Buenrostro
- Your complete contact information.
Remember, it is advised to report your broker to FINRA, only after you have exhausted all of your other remedies and carefully prepared a compelling complaint. Once you file a complaint against your broker at FINRA, your case will be bound by FINRA’s rules and the arbitration panel’s eventual decision. The time clock will start, and your complaint will be served on your broker or broker-dealer.