Pinnacle Partners Financial Corporation of San Antonio, TX, and Brian Alfaro were suspended indefinitely by FINRA for failure to comply with a FINRA Temporary Cease and Desist Order prohibiting their fraudulent misrepresentations.  The pair allegedly continued to make fraudulent oral and written misrepresentations and omissions in connection with their offer and sale of certain oil and gas joint interests, even after the Temporary Order was issued, on 1/21/11. 

        FINRA Complaint Allegations.   FINRA's complaint, filed 12/3/10, alleges that Alfaro and Pinnacle operated a "boiler room" in which numerous brokers placed thousands of cold calls each week soliciting investments in oil and gas drilling joint ventures that Alfaro owned or controlled.  FINRA asserts that Pinnacle raised more than $10 million from over 100 investors, and that Alfaro diverted some of the customer funds for unrelated business and personal expenses.  A hearing on these allegations is scheduled for 9/12/11. 

Pinnacle and Alfaro are charged with, among other things, numerous misrepresentations and omissions in the investment summaries for the offerings - including grossly inflated natural gas prices, projected natural gas reserves, estimated gross returns and estimated monthly cash flows.  They're further charged with deliberately attempting to mislead investors by deleting unfavorable information from well operator reports and providing doctored maps which omitted numerous dry, plugged or abandoned wells near their projected drilling sites. 

Alfaro's misuse of customer funds supposedly included attempts to retain the grossly inflated "drilling costs," which were funds he obtained by convincing customers to allow him to transfer their money into other fraudulent offerings.  In another instance, Alfaro collected more than $500,000 in subscription costs for a well that was never drilled - those funds were used for unrelated personal and business expenses.   [FINRA News, 4/19/11]