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Univ. of Toledo College of Law

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Wednesday, November 28, 2012

FINRA Charges President of TWS Financial with Affinity Fraud Directed at Polish Community

FINRA has filed a complaint against Roman Sledziejowski, President and owner of Brooklyn, NY-based brokerage firm TWS Financial, LLC, charging him with defrauding three customers of more than $4 million through a scheme, carried on primarily outside the securities firm, involving converting client funds to his personal use while providing falsified account statements to his customers. Sledziejowski, a Polish-born investment manager, and his firm TWS Financial, catered to the Polish investment community in Brooklyn, and all of his victims were natives of Poland. On November 9, 2012, TWS Financial filed an application to withdraw its broker-dealer registration.

In its complaint, FINRA alleges that between June 2009 and August 2012, as part of his scheme, Sledziejowski instructed the customers to wire funds from their bank accounts or brokerage accounts to Innovest Holdings LLC, a company wholly owned and controlled by Sledziejowski, separate from the broker-dealer, which, in turn, owned TWS, for various purported investment purposes, including acquiring a Polish bank and buying stock in a vodka company. In other instances, Sledziejowski wired funds directly from the customers' TWS brokerage accounts to Innovest Holdings without their knowledge or consent. In order to mask his misconduct, Sledziejowski provided customers with falsified account statements or "account snapshots," which were fictional accounts of their holdings in their TWS brokerage accounts or the values of those accounts. Additionally, when some of his customers raised questions about the value of their brokerage accounts or sought to withdraw funds from their accounts, Sledziejowski wired funds from Innovest's bank accounts back to their bank or brokerage accounts. To date, more than $3 million of the customers' funds remain unaccounted for. Sledziejowski also refused to comply with FINRA's request to appear for testimony to answer questions related to the misconduct in question.

http://lawprofessors.typepad.com/securities/2012/11/finra-charges-president-of-tws-financial-with-affinity-fraud-directed-at-polish-community.html

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