Father, son investment advisers sanctioned by Securities Commissioner
DENVER — Colorado Securities Commissioner Gerald Rome has approved the sanctions against investment adviser firm Luna Investment Services, Inc. (LIS), along with Richard Luna and Gabe Luna following a violation of a 2011 cease and desist order to which the elder Luna (Richard) had agreed.
In March of 2011 Richard Luna was owner of LIS, and Gabe Luna was a licensed investment adviser representative with the firm. Richard Luna, personally and on behalf of the firm, executed an order with the Division of Securities wherein he agreed not to borrow money from clients, a practice the firm had been engaged in that was in violation of the Colorado Securities Act.
Despite agreeing to cease and desist all violations, between the years of 2011 and 2017 the Division of Securities, part of the Department of Regulatory Agencies (DORA), discovered that both Luna advisers had engaged in borrowing money from investors through the use of promissory notes. The borrowed amounts total more than $3 million.
“When the Division stipulates to an agreement with a licensee over conduct that violates our laws, we expect them to take it seriously,” stated Rome. “Because Richard Luna failed to do so, we believe a bar from the securities industry is an appropriate sanction. And the required use of an outside compliance consultant by Gabe Luna will ensure that his firm fully complies with our rules in the future.”
As part of the Division’s newest sanctions, Richard Luna is barred from the securities industry in Colorado, and has agreed to never reapply for licensure. Gabe Luna agrees to cease and desist all violations of the Securities Act, and will be issued a letter of censure that he will be required to disclose to prospective clients. LIS and Gabe Luna will retain a compliance specialist for a period of three years to review current policy and develop new procedures for the firm. Gabe Luna will also pay a fine to the Division.
In signing the agreement, the Respondents agree that any further violation of the order will lead to formal proceedings.