Mass. agency files complaints against firm, broker

NEEDHAM, Mass. – The Massachusetts Secretary of State’s Securities Division last week filed two complaints against an investment firm and one of its brokers alleging a bait-and-switch campaign that exploited senior citizens using the dangers of Alzheimer’s disease to gain clients.
Both the company and broker say they will fight the allegations.
The Securities Division of Secretary of State William F. Galvin’s office filed the two complaints on July 8. The first complaint is against Nebraska-based Securities America Inc. alleging failure to supervise one of its agents by approving a deceptive advertising campaign. The second complaint is against the company’s agent, Barry Armstrong, alleging he engaged in a dishonest and misleading advertising campaign.
Securities America says it would fight the allegations.
“Securities America disagrees with the Massachusetts Securities Division’s enforcement action and will vigorously defend against the allegations brought,” according to a company statement sent to Providence Business News.
Attorney Timothy O. Egan, of Peabody and Arnold LLP, is representing Armstrong and said his client would also fight the allegations.
“Barry Armstrong is disappointed by the actions recently taken by the [Massachusetts] Securities Division,” Egan said in a statement.
The complaint alleges Armstrong’s ran radio advertisements urging listeners to call a telephone number to get free information on Alzheimer’s disease. But when listeners called in their information was taken down and they were later contacted by Armstrong’s employees who offered financial services. Respondents were also mailed financial services advertising and marketing material, according to the complaint.
“[Armstrong] ran a grossly deceptive AM radio advertising campaign targeted at vulnerable Massachusetts senior citizens,” according to the complaint. “[He] pulled a bait and switch, falsely advertising one service to obtain contact information and switch out for another – financial services.”
Egan says Armstrong is sincere and passionate about the fight against Alzheimer’s disease and has strived “to protect the public with valuable information about the disease and sound financial strategies that families can consider to protect themselves in the event they become a direct or collateral victim of the disease,” he said.
“Mr. Armstrong’s Alzheimer’s campaign resulted in dozens of interested listeners receiving valuable information about the disease that was prepared and approved by the National Institute on Aging,” he added.
A fact sheet on Alzheimer’s published by the National Institute on Aging was sent to respondents along with the advertising and marketing materials, according to the complaint.
The complaint alleges that Securities America, a Ladenburg Thalmann Financial Corp. company, approved the advertisement “without substantive or follow up of any kind.”
“Securities America’s failure to raise a single question about the content of the Alzheimer’s ads and the attendant mailing materials represents an utter failure that goes to the very purpose of a compliance function,” according to the complaint. “Securities America failed to prevent or even flag glaringly unethical conduct.”
Galvin’s office is seeking a cease and desist order against Armstrong, along with censure, an administrative fine and “any such further action which may be in the public interest and necessary and appropriate for the protection of Massachusetts investors.” Against Securities America, Galvin’s office is seeking a cease and desist order, a censure of the company, an order requiring it to obtain an independent compliance consultant and an administrative fine.
Egan says Armstrong intends to “vigorously defend his good name.”
“As far as we know, the ad generated zero consumer complaints and it is unclear what has prompted the [Massachusetts] secretary of state’s office to pursue this matter,” Egan said.
Securities America offers services in several states around the country, including Rhode Island.

No posts to display