The Financial Industry Regulatory Authority (FINRA) suspended Edward Antonio Salazar aka Ted Salazar of Houston, Texas through May 15, 2013, and ordered him to pay a total of $1.2 million, plus interest, in fines, forfeitures and restitution to customers after failing to research and conduct due diligence before advising customers to purchase extremely risky investments.
According to FINRA, in 2006, Salazar enticed a married couple to purchase A&O Bonded Life Settlement securities, securing a purchase of two A&O Settlements at $550,000 each, the $1.1 million funded by a surrendered annuity Salazar convinced the married couple to part with, even though the couple incurred $40,000 in surrender charges as a result. Salazar additionally received a commission of approximately $77,000.
In reviewing Salazar's actions, FINRA determined that he improperly advised clients to invest in extremely risky options without adequately researching the options he was recommending and without advising his firm at the time, Countrywide Investment Services, Inc. of Chandler, Arizona, of these recommendations.
FINRA alleged that had Salazar conducted due diligence, he would have discovered that the underlying life insurance policies had been obtained from Provident Capital Indemnity, Ltd., a Costa Rican company that in 1992 had been barred by California's Insurance Commissioner because it misrepresented the value of its assets.
Furthermore, in 2005, Provident's owners pled guilty in federal district court to aiding and abetting the introduction of a misbranded drug into interstate commerce with intent to mislead.
Shrouded in turmoil, Provident filed for Chapter 11 bankruptcy protection in 2009, causing the married couple to lose their entire $1.1 million investment.
Because his actions were so egregious, FINRA ordered Salazar to pay full restitution of $1.1 million, plus interest, in addition to levying a $30,000 fine and $77,000 in disgorgement of his ill-gotten commissions.
If you have invested with Edward Antonio Salazar aka Ted Salazar, Countrywide Investment Services, or any broker or firm you believe failed to conduct satisfactory due diligence and made improper recommendations that have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.