What You Need to Know
- The ex-broker allegedly defrauded investors as part of a cancer treatment scheme involving a private placement for a medical facility.
- The $5.7 million he was ordered to pay included $4.3 million in damages, $1,941 in costs and $1.4 million in attorney fees.
- During his time in the sector, 18 disclosures were filed against him.
A barred broker was ordered by a Financial Industry Regulatory Authority arbitration panel on Monday to pay $5.7 million to investors he allegedly defrauded as part of a cancer treatment scheme involving a private placement for a medical facility.
The $5.7 million included $4.3 million in total damages, $1,941 in costs and $1.4 million in attorney fees. The former broker, Dana Vietor, was also ordered to pay each of the 12 claimants $800 in FINRA filing fees.
Vietor’s ex-clients accused him of, among other things, breach of contract, breach of fiduciary duty, failure to supervise, fraud, misrepresentation, negligence and violations of the Iowa Securities Act, FINRA said. They sought $20 million in combined compensatory and punitive damages.
While he was a registered representative and broker, Vietor solicited investments in 2012 via an offering under Regulation D governing unregistered securities to purchase a building in Dallas to house cancer treatment and other equipment, according to the arb resolution award that was posted online Monday after the three-member arbitration panel signed the award Friday.
Vietor allegedly continued to accept investments in the same scheme through 2020, according to FINRA.
He had 31 years of experience in the industry as a broker with 13 firms, the last of which, from 2016 to 2018, was CFD Investments, also named as a respondent in the action. The arb panel, however, dismissed the case against CFD with prejudice.
During Vietor’s time in the sector, 18 disclosures were filed against him, according to his report on FINRA’s BrokerCheck website. He was barred from the industry by FINRA in March 2020.
“Without admitting or denying the findings” of a FINRA investigation into his actions, Vietor “consented to the sanction and to the entry of findings that he engaged in the sale of promissory notes called deposit agreements in connection with customers totaling more than $3 million without disclosing and receiving approval from his member firms for each individual private securities transaction,” according to one of the disclosures, citing a letter of acceptance, waiver and consent he signed.
Vietor, along with other business partners, engaged in a startup business venture that required funding, according to the disclosure. The deposit agreements raised funds for entities associated with the business venture.
“Vietor is a member of the management team that manages these entities and has membership interests in each. Therefore, Vietor received indirect selling compensation,” the disclosure said.
Vietor and his attorney, Andrew Shedlock, a partner at law firm Kutak Rock, did not immediately respond to requests for comment about the arb panel’s decision on Thursday.