Christopher Passero: GPB Capital Complaint Against Hurricane Rep

A recent enforcement action against Money Concepts Capital Corporation stockbroker Christopher Passero (CRD# 2517681) suspended him over alleged unauthorized payments to customers to compensate them for investment losses. Financial Industry Regulatory Authority records show that he is registered with the firm’s office in Hurricane, West Virginia. The president of the Passero Financial Group, he has also received investor complaints.

According to a Letter of Acceptance, Waiver, and Consent (No. 2020066345701) issued in April 2022, from 2006 until 2008 Christopher Passero recommended his customers invest in a real estate investment trust. That REIT’s share price declined after it re-stated its value in 2010, FINRA states, and the dividends it paid to investors decreased as well, with its final cash distribution made in August 2018. “Many” of Mr. Passero’s clients suffered losses on their investments, according to FINRA.

The AWC Letter goes on to state that Mr. Passero “began making payments” to some of his customers after the REIT re-stated its value in 2010, continuing to make these payments “through February 2020.” According to FINRA’s findings, he made 990 such payments to a total of nine customers at Money Concepts Capital Corporation, with the payments totaling $249,560. “[Mr.] Passero made the payments on a monthly basis and in various forms, including personal checks,” FINRA found.

As the AWC Letter notes, FINRA rules prohibit brokers like Mr. Passero from sharing in customers’ losses except under certain conditions; among others, they must seek and obtain prior written authorization from the firm and the customer. Furthermore, Money Concept Capital Corporation’s written supervisory procedures during the period in question prohibited unauthorized loss sharing, and Mr. Passero allegedly failed to notify the firm about these payments or receive its authorization. The firm “only discovered the payments when [Mr.] Passero’s customers filed an arbitration claim,” per FINRA.

FINRA’s findings state further that Mr. Passero improperly loaned $10,000 to a firm customer, “to assist the customer in paying a tax liability,” in violation of firm policies forbidding brokers from lending money to their clients without its authorization. FINRA Rule 3240(a) similarly prohibits brokers from making or receiving loans to customers without firm authorization, among other conditions. 

In connection with the above findings, FINRA issued Mr. Passero a fine of $10,000. It also suspended him from associating with any FINRA member in any capacity for three months.

Mr. Passero’s BrokerCheck report discloses multiple investor complaints. One pending complaint, filed in January 2021, alleges that as a representative of Money Concepts Capital, he recommended an unsuitable investment in GPB Capital, breached his fiduciary duty, breached contract, committed fraud, acted negligently, and breached his fiduciary duty, alleging damages of $150,000. A complaint filed in 2020 alleged that as a representative of Money Concepts Capital, he acted negligently, breached his fiduciary duty, made misrepresentations and omissions of facts, committed fraud, and recommended an unsuitable non-traded real estate investment trust (REIT). In 2021 this complaint reached a settlement of $90,000.

According to the Financial Industry Regulatory Authority, Christopher Passero holds 27 years of securities industry experience. He has been affiliated with Money Concepts Capital Corp. in Hurricane, West Virginia since 1998. His past registrations include Emissary Financial Group (Mentor, Ohio; 1998) and Money Concepts Capital (Palm Beach Garden, Florida; 1994-1998). His credentials include the passage of four securities industry qualifying exams: the Uniform Securities Agent State Law Examination, or Series 63; the Securities Industry Essentials Examination, or SIE; the General Securities Representative Examination, or Series 7; and the Investment Company Products/Variable Contracts Representative Examination, or Series 6. He holds 25 state licenses. (Information current as of April 26, 2022.) 

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