FINRA, a self-regulatory body that oversees around 630,000 brokers alongside the companies where they are employed, had most recently banned 11 brokers from working in the industry of securities, while 16 people were suspended from the sector. One of the latest bans that FINRA imposed is revolving around a 1.5 million dollars-worth scam.

In the recent case where FINRA, the Financial Industry Regulatory Authority, had to react to the alleged scheme that involved trading of bitcoin (BTC) at a discounted price from private investors, 1.5 million dollars of investors’ funds disappeared.

The evidence all leads the US regulator to a trader named Daniel Todd Levine from Englewood, Colorado when Levine offered certain investors the opportunity to but bitcoin units at favorable rates and with increased returns.

Bitcoin Scam

Discounts were reportedly ranging from 60 to 90 percent for trading bitcoin, while it is described that Levine’s brother was supposed to buy the discounted bitcoin from an unknown private seller overseas.

Former Morgan Stanley’s Employee Involved in a Recent Bitcoin Scam

Even though the exact amount of the missing money collected from investors who were interested in Levine’s offer is not determined to details, investors reportedly wired 1.5 million dollars to Levine who was formerly working as a broker at Morgan Stanley.

The prominent company soon started to look into Levine’s matters regarding the bitcoin scam allegations, when the trader quit his position at Morgan Stanley.

Furthermore, on the case, the state documents indicate that Daniel Todd Levine was supposed to receive a commission that would top 2 million dollars, while he reportedly sent the funds he collected to investors to his brother who is a US fugitive with an unknown residence somewhere in Europe.

According to Colorado Division of Securities, Levine’s brother has been a fugitive from the US law enforcement since 2005, having Daniel Todd Levine later admitting that he was deluded by his brother.

Levine didn’t admit or negate his guilt or partake in the alleged bitcoin scam, while a part of the funds is said to be returned to some of the unfortunate investors, however, he did sign the authority letter of acceptance, waiver and consent order imposed by FINRA.

According to the official website of the US-based regulatory body, Daniel Todd Levine signed a consent order on Jan. 8th, 2019.

FINRA also shared the official documents of the case, where it is stated that Levine violated several rules by failing to submit records and documents needed for the investigation although Levine previously acknowledged having received FINRA’s requests for the required information.

In the meanwhile, the Securities and Exchange Commission alongside FINRA is advising investors to always perform background checks on their financial advisors.

The Inability to Resolve an Active Regulatory Action Cost Levine Two Jobs

Besides from leaving his position at Morgan Stanley’s as the company started to look into the matter of a regulatory action being taken against Levine, the barred Colorado trader was soon fired from his position at First Financial Equity for the same reason.

After quitting his job at Morgan Stanley, Levine was soon hired to work on the same position at First Financial Equity, a financial brokerage service provider, however, the inability to disclose active regulatory matters against him cost him another job.

FINRA has been working on several allegations involving Daniel Todd Levine within their investigation by far, where Levine was allegedly engaged in soliciting customers into borrowing money for an overseas trade, was involved in undisclosed outside business activities, have been executing unauthorized trades alongside several more accusations, while the US regulator is acting upon the case as a General Securities Representative.


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Posted by Priyeshu Garg

Priyeshu Garg is a software engineer at a unicorn, while he is not solving complex programming problems - he writes about blockchain and trades cryptocurrencies.


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