On February 12, 2020, the Financial Industry Regulatory Authority (“FINRA”) permanently barred Ronald Hannes (Ronald Walter Hannes CRD# 1452241) from associating with any FINRA member in any capacity for refusing to cooperate with FINRA officials during their investigation of him for conversion of consumer funds. Hannes operated out of Hannes Financial Services Inc in Spokane Washingon. Letter of Acceptance Waiver and Consent No. 2019064915301 (Feb. 13, 2020). Hannes was previously registered with Woodbury Financial Services Inc. in Spokane, Washington from 1994-2019.
Prompting FINRA’s investigation was a Uniform Termination Notice for Securities Industry Registration (U5) which was filed on December 18, 2019. According the AWC, “. . .[b]y Uniform Termination Notice for Securities Industry Registration (Form U5) dated December 18, 2019, Woodbury terminated Hannes’ association with the Firm and disclosed that the Firm ‘received notice from a client that funds were paid to [Hannes] for purchase of a life insurance contract that were not forwarded to the life insurance company.’” Id.
Following Hannes’ termination from Woodbury based on allegations of theft of his customers’ funds, FINRA sent a request to Hannes on January 7, 2020 for documents and information. FINRA also demanded that these documents and information be produced by January 21, 2020.
A week after FINRA’s deadline for producing documents and information, Hannes’ counsel sent a letter to FINRA, on January 28, 2020, indicating that he will not comply with FINRA’s request or cooperate in their investigation. As a result of Hannes’ refusal to comply with FINRA, Hannes was determined to have violated FINRA Rules 2010 and 8210.
Washington Securities Regulators Charge Ronald Hannes With Employing Scheme to Defraud his Clients
About a month after FINRA barred Hannes from the securities industry, Washington Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Deny Future Registrations, Impose Fines, and Charge Costs (“Charges”) against him, on March 25, 2020. According to the Charges, Hannes is alleged to have been “employing a scheme to defraud his clients by selling unregistered, fictitious investments, concealing these sales from his broker-dealer, and falsifying documents in response to the broker-dealer’s internal investigation. The Securities Division further alleges that Hannes defrauded at least nineteen clients of at least $2.9 million.” 2020 Division of Securities Enforcement Actions, Washington State Department of Financial Institutions.
The Charges by the State of Washington seek an “. . . order to cease and desist from violations of the Securities Act of Washington, to impose a fine of $100,000, to charge investigative costs of $5,000, and to deny any of Hannes’s future investment adviser representative or securities salesperson applications for registration.” Id.
Were You Or Someone You Know The Victim Of Financial Fraud?
Brokerage firms have a responsibility to supervise their representatives so as to prevent the type of scheme orchestrated by Hannes. Firms must also take steps to ensure that their representatives follow all securities rules and regulations, as well as internal policies and procedures. Failure to uphold these standards could render the brokerage firm liable for the losses suffered by customers.
Silver Law Group represents investors nationwide who were victims of financial fraud, Ponzi schemes and a range of other misconduct. If you or someone you know lost money investing with Ronald Hannes, please contact the Silver Law Group toll free at (800)-975-4345 or email email@example.com for a confidential consultation.