Joseph James Hennessy Audit (2023) – A Scam or Legit Broker?

Joseph James Hennessy  – and the firm that employs him or her – is regulated by the Financial Industry Regulatory Authority (FINRA).

If you are like most people, before you go out to dinner at a new restaurant, you probably take a quick look at the reviews. This makes sense; you are going to pay for an expensive dinner, and you need to be sure that you are getting a good value.

Yet, when choosing a financial advisor, many people fail to conduct this same level of due diligence. Before turning over access to your money, you need to be sure that you have found a financial advisor that you can trust. Here, our audit report, including details of allegations, complaints, and sanctions will help you decide whether or not to invest with Joseph James Hennessy.

BrokerComplaints.com is currently investigating allegations related to Joseph James Hennessy. We provide a free platform for investors to help them in their claims against negligent brokers and brokerage firms.

About Joseph Hennessy

Joseph James Hennessy is an Investment Adviser. Joseph James Hennessy’s Central Registration Depository (CRD) number is 1380254 and the FINRA Profile can be found at – https://brokercheck.finra.org/individual/summary/1380254.

Click here to download a Detailed Audit Report for Joseph James Hennessy.

Joseph James Hennessy has previously been reprimanded and has disclosures and/or client dispute(s) listed at FINRA BrokerCheck.

Accusations and Disclosures

You can find below, a quick snapshot of Joseph James Hennessy’s regulatory actions, arbitrations, and complaints.

DISCLOSURE 1 – 

• Event Date: 6/27/2016
• Disclosure Type: Regulatory
• Disclosure Resolution: Pending
• Disclosure Detail :: DocketNumberFDA:
• Initiated By: STATE OF ILLINOIS, ILLINOIS SECURITIES DEPARTMENT
• Allegations: RESPONDENTS RESOURCES PLANNING GROUP, INC., TERRANCE R. HENNESSY AND MICHAEL J. MARIETTI IV VIOLATED SECTION 12.A OF THE ILLINOIS SECURITIES ACT; RESPONDENT RESOURCES PLANNING GROUP, INC VIOLATED SECTION 12.D OF THE ILLINOIS SECURITIES ACT; RESPONDENTS RESOURCES PLANNING GROUP, INC; AND JOSEPH J. HENNESSY, VIOLATED SECTIONS 12.F, 12.G, 12.I AND 12.J OF THE ILLINOIS SECURITIES ACT. HEARING SCHEDULED FOR AUGUST 30, 2016 AT 10:00 A.M.
• Sanction Details ::

DISCLOSURE 2 – 

• Event Date: 7/9/2013
• Disclosure Type: Regulatory
• Disclosure Resolution: Final
• Disclosure Detail :: DocketNumberFDA:
• Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION
• Allegations: SEC ADMIN RELEASE 34-69950, IA RELEASE 40-3623, JULY 9, 2013: THE SECURITIES AND EXCHANGE COMMISSION (COMMISSION) DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND SECTION 203(F) OF THE INVESTMENT ADVISERS ACT OF 1940 (ADVISERS ACT) AGAINST JOSEPH J. HENNESSY ( ESPONDENT OR ESPONDENT HENNESSY). ON MAY 7, 2013, A JUDGMENT WAS ENTERED BY CONSENT AGAINST RESPONDENT HENNESSY, PERMANENTLY ENJOINING HIM FROM FUTURE VIOLATIONS OF SECTIONS 17(A) OF THE SECURITIES ACT OF 1933, SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER, AND SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-8(A)(1), IN CIVIL ACTION NUMBER 12-CV-9509, IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS.
• Resolution: Order
• Sanction Details :: Sanctions: Bar (Permanent)
• Sanction Details :: Registration Capacities Affected: FROM ASSOCIATION WITH ANY BROKER, DEALER, IA, MUNICIPAL SECURITIES DEALER, MUNICIPAL ADVISOR, TRANSFER AGENT, OR STAT RATING ORG
• Duration: Indefinite
• Start Date: 7/9/2013 Registration Capacities Affected: FROM PARTICIPATING IN ANY OFFERING OF A PENNY STOCK
• Duration: Indefinite
• Start Date: 7/9/2013

DISCLOSURE 3 – 

• Event Date: 2/6/2013
• Disclosure Type: Employment Separation After Allegations
• Disclosure Resolution:
• Disclosure Detail :: Firm Name: HLM SECURITIES
• Termination Type: Permitted to Resign
• Allegations: IMPROPER ALLOCATIONS OF ASSETS

DISCLOSURE 4 – 

• Event Date: 1/31/2013
• Disclosure Type: Regulatory
• Disclosure Resolution: Final
• Disclosure Detail :: DocketNumberFDA: 2012033110701
• DocketNumberAAO: 2012033110701
• Initiated By: FINRA
• Allegations: RESPONDENT HENNESSY FAILED TO RESPOND TO FINRA REQUEST FOR INFORMATION.
• Resolution: LETTER
• Sanction Details :: Sanctions: Bar (Permanent)
• Sanction Details :: Registration Capacities Affected: All Capacities
• Duration: Indefinite
• Start Date: 5/3/2013
• Regulator Statement: PURSUANT TO FINRA RULE 9552(H) AND IN ACCORDANCE WITH FINRA’S INTENT TO SUSPEND AND NOTICE OF SUSPENSION LETTERS DATED JANUARY 31,2013 AND FEBRUARY 25,2013, RESPECTIVELY, ON MAY 3, 2013, HENNESSY IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. HENNESSY FAILED TO REQUEST TERMINATION OF HIS SUSPENSION WITHIN THREE MONTHS OF THE DATE OF THE NOTICE OF INTENT TO SUSPEND; THEREFORE, HE IS AUTOMATICALLY BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY.

DISCLOSURE 5 – 

• Event Date: 12/14/2012
• Disclosure Type: Regulatory
• Disclosure Resolution: Final
• Disclosure Detail :: DocketNumberFDA:
• Initiated By: ILLINOIS
• Allegations: RESPONDENTS FAILED TO REPORT TO THE SECRETARY OF STATE THAT A DIRECT OWNER AND EXECUTIVE OFFICER OF RESPONDENT HLM, JAMES JOSEPH HENNESSY WAS THE SUBJECT OF THE SEC’S ONGOING CIVIL PROCEEDING
• Resolution: Order
• Sanction Details :: Sanctions: Suspension
• Sanction Details :: Registration Capacities Affected: ALL CAPACITIES
• Duration: UNTIL REVERSED BY THE SECRETARY OF STATE
• Duration Explanation: UNTIL REVERSED BY THE SECRETARY OF STATE
• Start Date: 3/14/2013

DISCLOSURE 6 – 

• Event Date: 11/29/2012
• Disclosure Type: Civil
• Disclosure Resolution: Final
• Disclosure Detail :: Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION
• Allegations: SEC LITIGATION RELEASE 22548, NOVEMBER 29, 2012: THE SECURITIES AND EXCHANGE COMMISSION FILED A COMPLAINT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AGAINST JOSEPH J. HENNESSY AND HIS FIRM, AN INVESTMENT ADVISER, FOR DEFRAUDING CLIENTS AND OTHERS WHO WERE PROMISED RETURNS THAT WOULD BEAT THE MARKET FOR INVESTING IN A PRIVATE EQUITY FUND THEY MANAGED. WHAT INVESTORS DIDN’T KNOW WAS THE FUND WAS FAILING AND THEY WERE BEING USED TO RAISE MONEY TO REPAY PROMISSORY NOTES TO EARLIER INVESTORS. THE SEC ALLEGES THAT HENNESSY AND THE FIRM RAISED MORE THAN $1.3 MILLION BY MISREPRESENTING THE FUND AS A VIABLE PRIVATE EQUITY FUND THAT COULD OFFER HIGH RETURNS. HENNESSY FAILED TO TELL INVESTORS ABOUT THE FUND’S POOR FINANCIAL CONDITION OR THAT THEIR MONEY WAS BEING USED TO REPAY FUND PROMISSORY NOTES THAT HE HAD PERSONALLY GUARANTEED. HE THEREFORE MISAPPROPRIATED CLIENT FUNDS TO MAKE PAYMENTS ON THE NOTES AND PROP UP THE FUND. ACCORDING TO THE SEC’S COMPLAINT, HENNESSY FINANCED THE FUND’S ACQUISITION OF ITS LARGEST PORTFOLIO COMPANY IN 2007 IN PART BY HAVING THE FUND ISSUE $1.65 MILLION IN PROMISSORY NOTES, ALL OF WHICH HE PERSONALLY GUARANTEED. WHEN THE FUND’S PORTFOLIO COMPANIES WERE UNABLE TO PAY MANAGEMENT FEES LATER THAT YEAR, THE FUND LACKED SUFFICIENT FUNDS TO REPAY THE NOTES. FROM SEPTEMBER 2007 TO MARCH 2010, HENNESSY RAISED $1.36 MILLION FROM FIRM CLIENTS AND OTHER INVESTORS TO MAKE PAYMENTS ON THE NOTES. HENNESSY FALSELY TOLD INVESTORS THAT THE FUND WAS VIABLE AND OFFERED HIGH RETURNS. THE SEC FURTHER ALLEGES THAT HENNESSY MISAPPROPRIATED MONEY FROM FIRM CLIENTS. IN NOVEMBER 2007, HE RAISED $750,000 FROM THREE FIRM CLIENTS PURPORTEDLY TO INVEST IN THE FUND. BUT THEN HENNESSY USED THAT MONEY TO REDEEM ANOTHER CLIENT’S INVESTMENT IN THE FUND. TWICE IN MID-2009, HENNESSY FORGED LETTERS OF AUTHORIZATION FROM A WIDOWED FIRM CLIENT TO TRANSFER $100,000 FROM HER ACCOUNT TO THE FUND IN EXCHANGE FOR PROMISSORY NOTES THAT HAVE YET TO BE REPAID. THE SEC’S COMPLAINT CHARGES HENNESSY WITH VIOLATING SECTION 17(A) OF THE SECURITIES ACT OF 1933, SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5. HENNESSY IS ALSO CHARGED WITH VIOLATING SECTIONS 206(1), (2) AND (4) OF THE INVESTMENT ADVISERS ACT OF 1940 AND RULE 206(4)-8.
• Resolution: Judgment Rendered
• Sanction Details :: Sanctions: Injunction

DISCLOSURE 7 – 

• Event Date: 9/15/2011
• Disclosure Type: Customer Dispute
• Disclosure Resolution: Settled
• Disclosure Detail :: Allegations: IMPROPER INVESTMENT ADVISE, UN AUTHORIZED INVESTMENT
• Damage Amount Requested: $600,000.00
• Settlement Amount: $116,250.00
• Arbitration Docket Number:

According to a study prepared for the FINRA Investor Education Foundation, 80 percent of American investors report that they have been solicited to participate in a fraud scheme, while 11 percent of American investors report that they personally lost money as a result of fraud.

FINRA notes that the rate of investment fraud is most likely much higher than it is reported. This is because many victims of financial advisor scams are too ashamed to come forward. Further, the study also found that a significant number of investors do not know how to spot common red flags of investment fraud. The least you should do is share your experience with other potential victims of investment scams.

Previous Associations

Under federal securities law and securities industry regulations, registered investment firms have a legal duty to supervise their financial advisors. Section 15(b)(4)(E) of the Securities and Exchange Act of 1934 makes a securities firm liable for the conduct of representatives.

• HLM SECURITIES, INC. (CRD#: 133216) :: 4/22/2005 – 2/7/2013 :: CHICAGO, IL
• ROYAL ALLIANCE ASSOCIATES, INC. (CRD#: 23131) :: 11/19/1989 – 12/9/2004 :: JERSEY CITY, NJ
• INTEGRATED RESOURCES EQUITY CORPORATION (CRD#: 6403) :: 1/8/1987 – 11/19/1989
• PLUMWOOD SECURITIES CORPORATION (CRD#: 15205) :: 9/25/1985 – 12/19/1986

The duty to supervise securities representatives is a strong legal requirement. Registered investment firms must take many different steps to ensure that they are protecting their customers from irresponsible and criminal financial advisors.

Legit or Not?

Unfortunately, stockbroker fraud is more common than many investors would like to think. And yes, stockbrokers (including Joseph James Hennessy, but not limited to)  can (and do) steal money from their clients. While it’s rare that a broker will literally steal his client’s money (though that does happen), typically the “theft” of investment funds comes in the form of other fraudulent violations of securities law and FINRA rules which leads to significant investment losses.

Investors generally understand that there are risks associated with buying and selling securities. The market can go up, and the market can go down. No matter how skilled of an investor you are, there are always risks. With that being said, sometimes investment losses cannot be blamed on simple back luck.

There are 10 major types of complaints we receive against Investment Brokers –

• Outright Theft (Conversion of Funds)
• Unauthorized Trading
• Misrepresentation or Omission of Material Facts
• Excessive Trading (Churning)
• Lack of Diversification
• Unsuitable Investment Recommendations
• Failure to Disclose a Personal Conflict of Interest
• Front Running of Transactions
• Breakpoint Sale Violations
• Negligent Portfolio Management

Do your due diligence before investing. Public records are available for everybody to review and decide on the safest bet. 

How to Protect Yourself

We, as citizens, place a great deal of trust in the financial advisors who are tasked with helping us achieve and maintain financial security. Most of the time financial advisors and stockbrokers are honest folks who work diligently in their client’s best interests. However, on occasion financial advisors and the brokerage firms who employ them mess up and cause serious financial harm to their clients. Sometimes these losses are caused by simple negligence. Other times fraud or other serious misconduct is to blame.

Here are 5 signs that your broker needs to be reported –

• Breach of Fiduciary Duty: Under the Investment Advisers Act of 1940, certain investment professionals, known as registered investment advisors (RIAs), owe fiduciary obligations to their customers. Your investment broker must always look out for your best interests. If you lost money because of your broker’s breach of fiduciary duty, you may be entitled to compensation for the full value of your damages.
• Unsuitable Investments: Many financial advisors are not fiduciaries. Instead, they are held to the suitability standard. These stockbrokers and financial advisors can only sell and recommend financial products that are appropriate for a customer’s unique investment profile. If you lost money in unsuitable investments, you should consider reporting them.
• Material Misrepresentations or Omissions: Brokers have a duty to make fair and honest representations to their clients. If they fail to do so, and an investor loses money due to a misrepresentation or a material omission, the broker may be liable for the investor’s losses.
• Lack of Diversification: Brokers must also act with the appropriate level of professional skill. Pushing a customer into over-concentrated investments is highly risky. Brokers can be held liable for losses sustained because of an investor’s inappropriate lack of diversification.
• Excessive Trading (Churning): Stockbrokers and financial advisors must have a well-grounded, reasonable basis to execute all trades. Unfortunately, there are cases in which brokers will frequently trade on a customer’s account, simply to increase their own fees. This unlawful practice is known as churning.
• Unauthorized Trading: Brokers must have the proper legal authority to make transactions on behalf of a client. If you lost money because your broker made trades that you never approved of, you may have been the victim of unauthorized trading. You should consult with an experienced attorney.

Report Joseph Hennessy

In order to prevail in an investment fraud lawsuit or FINRA arbitration cases, you must be able to assert a viable ‘cause of action’.

Joseph James Hennessy – and the firm that employs this broker – is regulated by the Financial Industry Regulatory Authority (FINRA). FINRA provides an online form to allow investors to file a formal complaint against their financial advisor, stockbroker, or brokerage firm.

Click here to go to FINRA’s Online Complaint Form →

This form will ask you for specific information related to your complaint. Be prepared by gathering the following:

• Name and symbol for the investment product in question.
• The CRD number (1380254) for the broker – Joseph James Hennessy
• Your complete contact information.

Remember, it is advised to report your broker to FINRA, only after you have exhausted all of your other remedies and carefully prepared a compelling complaint.  Once you file a complaint against your broker at FINRA, your case will be bound by FINRA’s rules and the arbitration panel’s eventual decision. The time clock will start, and your complaint will be served on your broker or broker-dealer.

The views and opinions expressed in these articles are those of the source BROKERCOMPLAINTS.COM and do not necessarily reflect the official position of ‘Complaints Fraud Report,’ which shall not be held liable for any inaccuracies presented. The information provided within this article is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability of the information in this article for any purpose.

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