(FINRA Case #2015045456401)
David Oscar Braeger (CRD #2137240, Bayside, Wisconsin) – Braeger appealed an OHO (Office of Hearing Officers) decision to the NAC (National Adjudicatory Council). Braeger was barred from association with any FINRA member firm in all capacities.
The sanction was based on findings that Braeger converted his customers’ $30,000 and that he made false and misleading statements over the course of more than five years to conceal his conversion.
The findings stated that Braeger misused and converted his customers’ investment funds, a $30,000 check that the customers, a married couple, intended to invest in a private offering for an investment fund that he created and controlled.
Braeger never invested the money in the manner the customers intended and intentionally took the customers’ money for his own benefit. Instead of depositing the customers’ funds into the escrow account for the offering or causing them to be deposited at the escrow agent for the investment fund, Braeger endorsed the customers’ check and caused it to be deposited elsewhere. Braeger purposely told them to write the check in such a way that he could deposit it in the fund’s bank account that he controlled, instead of the fund’s escrow account, which he did not control.
The findings also stated that Braeger made misrepresentations to his customers regarding the value and status of their purported investment. For approximately a year after receiving the check, Braeger provided quarterly statements to the customers purporting to reflect the value of their private offering investment, even though they had no such investment. Then, Braeger closed the investment fund. Braeger directed the commodities clearing firm for the investment fund’s trading accounts to liquidate those trading accounts and send the proceeds to the fund’s bank account.
Although Braeger had checks printed and sent liquidation proceeds to other investors, Braeger did not inform the customers that the investment fund had closed, and they received no money from the liquidation of the fund.
Even though the entity no longer existed, Braeger continued to mislead the customers, who continued to believe that their monies remained in the investment fund. Among the many written and oral misrepresentations Braeger made to the couple each year from 2010 through 2014, Braeger provided the couple with false Schedule K-1s for their income tax returns. The K-1s showed that the couple held an interest in the fund and gave a specific value to the investment. In the context of trying to obtain the Schedule K-1 for a later tax year, the couple came to conclude that Braeger had deceived them. They then submitted a complaint to FINRA.
The sanction is not in effect pending the appeal.
Braeger was most recently employed by Midtown Partners (CRD# 104223) which ended in July 2014. In Braieger’s 22 year FINRA employment history he has worked for 16 different firms, in 10 different states.
If you feel you have been misled by a David Oscar Braeger or Brokerage Firm and wish to discuss legal action, please contact Darren Blum at 1-877-786-2552 (1-877-STOCK LAW), www.stockattorneys.com for a free consultation.
Blum Law Group is a law firm with a worldwide practice representing individuals and institutions in disputes with Wall Street and the financial services industry.