FINRA is seeking a Temporary Cease and Desist Order (TCDO) against San Antonio-based Pinnacle Partners Financial Corporation and its President Brian Alfaro for fear that customer harm and depletion of customer assets will likely continue before a formal disciplinary proceeding against Pinnacle and Alfaro can be completed.  The TCDO would halt allegedly fraudulent and illegal sales activities at the firm relating to 8 unregistered private placements selling interests in oil and gas joint ventures. 

It's alleged that, from August 2008 to present, Alfaro and Pinnacle operated a "boiler room" in which numerous brokers placed thousands of cold calls every week to solicit investments in Alfaro's oil and gas drilling joint ventures.  The operators of the ventures are entities owned or controlled by Alfaro.  All told, they raised more than $10 million from over 100 investors. 

    FINRA charges.   In its complaint, FINRA alleges that:

• Pinnacle and Alfaro provided investors with investment summaries for 8 separate O&G offerings that included numerous misrepresentations and omissions including grossly inflated natural gas prices, projected natural gas reserves, estimated gross returns and estimated monthly cash flows;
• Alfaro misused customer funds by spending those funds on unrelated business and personal expenses, rather than on drilling and testing of wells;  
• Pinnacle and Alfaro sold unregistered securities;
  
• Pinnacle and Alfaro destroyed documents and maintained inaccurate books and records;
  
• Pinnacle and Alfaro failed to report numerous customer complaints.

Hearings will be conducted;  possible sanctions include fines, restitution, censure, suspension, or bar from the securities industry.   [FINRA News Release, 12/3]