Brian Borakowski and George Kardaras may have started committing fraud as early as 2006
On November 29th we listed several stockbrokers who had their tickets pulled by the Financial Industry Regulatory Authority (FINRA). Included on that list were two Arizona residents, Brian Borakowski and George Kardaras. Until recently, Borakowski worked at Berthel Fisher while Kardaras was a broker with J.P. Turner.
FINRA claims the two men defrauded investors in a promissory note investment scheme. Instead of investing the money as advertised, FINRA says the men engaged in a Ponzi scheme and used some of the funds for their own personal gain. Making things worse, the pair failed to tell their employers about their outside activities, although they were marketing their promissory notes to firm clients.
The fraud apparently came to light in 2011 yet it took two years for the men to lose their securities licenses. Documents obtained from the Arizona Corporation Commission suggest that regulators knew about the wrong doing as early as 2011.
According to a cese and desist order dated February 24th of 2012, George Kardaras and Brian Borakowski were friends as early as 2001. Kardaras learned in 2006 that Borakowski had created a company called Echo Canyon. The business claimed to buy cars at auction and ship them to Russia.
Arizona says that while working at J.P.Turner, Kardaras solicited his existing customers to purchase promissory notes issued by Echo Canyon. He ultimately raised $665,900. [Ed. Note: When a stockbroker sells an investment product without the knowledge and consent of his employer, he is said to be “selling away.” It dangerous because the firms can’t police what they don’t know about. It is also illegal. Visit our new post on stockbroker fraud and selling away for a more comprehensive explanation.]
While some of the money did go to purchase vehicles, much of it was sent to Borakowski who then turned around and invested the money in Kardaras’ brokerage business. Obviously, neither investment worked.
Stockbrokers and investment advisers can be held responsible or losses when they lie to or mislead clients. The brokerage firms that employ them can also be held responsible.
Why? Because brokerage firms have a duty to supervise their workforce and can even be held liable when the broker engages in selling unauthorized products. The latter is called “selling away.”
Taking client money in secretly reinvesting in a business owned by the broker is fraud. Although the seven investors in Echo Canyon have or will likely made whole, we wonder about how many other clients of Brian Borakowski or George Kardaras received bad investment advice. While no broker can guarantee results, financial advisers are required to only make suitable recommendations for their clients. We suspect that these men may have made recommendations based on their commissions instead of in the best interests of their clients.
Both men have been out of the securities industry for quite some time. Unfortunately, state and federal law limit how much time investors have to file suit. If you received unsuitable investment advice, don’t delay. Contact an experienced investment fraud lawyer immediately.
For more information, contact attorney Brian Mahany at or by telephone at (direct). All inquiries answered within 24 hours and are protected by the attorney – client privilege. Cases accepted in many jurisdictions. We handle cases against bad brokers and their employers on a contingent fee basis meaning no fee unless we win.
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Tagged: stockbroker fraud, failure to supervise, churning, suitability, stockbroker fraud lawyer, selling away