The U.S. Securities and Exchange Commission (“SEC”) recently
barred a Dallas-area broker from the securities industry of his involvement
in a classic “selling away” scam. The broker, Gregory Todd Froning, is alleged to have raised
approximately $850,000 from fifteen of his brokerage customers and advisory
clients between 2005 and 2009. Froning raised the funds through an unregistered
offering of promissory notes secured by rights to convert to equity interests
in Wealth Planning Partners LLC, a financial planning company he owned.
According to the SEC complaint, investors were told that their money would
be used to “fund operating expenses and growth of the financial
planning company.” However, Froning diverted the funds for personal
use, and in typical Ponzi-scheme fashion used some of the funds raised
from newer investors to pay “returns” to older investors.
Although the SEC complaint does not mention the firms Froning was associated
with by name, a check of his CRD reveals that he worked at LPL Financial
Corporation until mid-2009 when he moved briefly to Brewer Financial Services,
LLC. Froning is no longer registered with FINRA.
here to read the SEC’s complaint.