Between May 2013 and March 2018, former Merrill Lynch broker Frank Zito allegedly participated in 15 private securities transactions involving Madison Timber Properties (MTP) without obtaining approval from his FINRA member firm, according to FINRA’s Letter of Acceptance, Waiver and Consent (AWC), under review by attorney Alan Rosca.
Investor rights attorney Alan Rosca of the Rosca Scarlato LLC law firm is investigating the alleged participation of former broker Frank H. Zito in Madison Timber Properties’ Ponzi scheme.
Investors who are concerned they may have lost money in activity related to Frank Howard Zito’s Madison Timber Properties promissory notes recommendations are encouraged to contact attorney Alan Rosca with any useful information or for a free case evaluation and discussion of recovery options. Call 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
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Frank Zito Allegedly Made $5 Million in Unsuitable Promissory Notes Recommendations
From July 2010 until April 2018, Zito allegedly invested in Madison Timber Properties and during that time, he generally held three promissory notes with staggered maturities simultaneously. As one note matured, he moved the returned principal into a new note, the AWC notes.
In May 2013, former broker Frank Zito allegedly recommended Madison Timber Properties to one of his customers at Merrill Lynch. The customer reportedly maintained investments in three promissory notes simultaneously. After nearly five years, Zito’s customer managed to invest in 15 promissory notes totaling $5 million. Zito allegedly received nearly $100,000 in commission from his customer’s Madison Timber Properties investments, the AWC reports.
Frank Howard Zito allegedly did not disclose his participation in these private securities transactions to Merrill Lynch. It is important to note that from 2014 through 2017, Zito allegedly submitted four annual certifications to Merrill Lynch denying allegations of any offering recommendations or private securities transactions that were not offered through Merrill Lynch, the AWC notes.
Frank Zito Has Been Suspended and Fined by FINRA for Allegedly Participating in Private Securities Transactions
According to the AWC, during 2011 and 2012, Frank Zito was allegedly involved in helping Madison Timber Properties’s owner find underwriting for a notional private-placement equity offering and reportedly arranged a meeting between the offering’s backers and representatives of a local business-advisory firm.
In October 2012, former broker Frank Zito allegedly began receiving sporadic payments from Madison Timber Properties as compensation for his efforts even though the offering never raised any money, the AWC reports. Zito allegedly received payments from Madison Timber Properties until March 2018, totaling nearly $130,000 in compensation.
Frank Zito investors should be aware that Zito allegedly failed to provide Merrill Lynch with written notice that he was receiving compensation from Madison Timber Properties as a result of an outside business activity. In addition, during October 2012 and March 2018, Zito allegedly submitted five annual certifications to Merrill Lynch denying payments by a third party for business conducted outside of the firm, as stated on the AWC.
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As a result, Zito received a 16-month suspension from associating with any FINRA member firm in any capacity and a $10,000 fine. The suspension will continue until May 18, 2022. Frank Howard Zito signed the AWC accepting and consenting to FINRA’s findings, without admitting or denying the findings, and solely for the purposes of the proceeding brought by or on behalf of FINRA , prior to a hearing and without an adjudication of any issue of law or fact.
Investors who are concerned they may have suffered a loss in activity related to Frank Zito’s Madison Timber Properties promissory notes recommendations may contact attorney Alan Rosca with any useful information or for a free case evaluation and discussion of recovery options. Call 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
Frank Zito Has Been Sanctioned by the Mississippi Securities Division
In November 2018, former broker Frank Zito consented to a sanction by the Mississippi Secretary of State Securities Division Consent Order on allegations of failure to disclose outside business activities and selling away private securities while associated with Merrill Lynch.
Frank Howard Zito failed to disclose on his U-4 that he was allegedly engaging in securities transactions and receiving commissions for his involvement in Madison Timber Properties Ponzi scheme.
Zito consented to a disgorgement to the tune of $200,000. In addition, according to the Order he agreed to complete six hours of financial industry related training; 3 hours focused on ethics and 3 hours focused on compliance. He also consented to heightened supervision.
What Investors Should Know About Madison Timber Properties Ponzi Scheme
Arthur Lamar Adams, the owner of Madison Timber Properties allegedly misrepresented to investors that their money would be used by his company to secure harvest timber rights from various landowners located in Alabama, Florida, and Mississippi, according to the SEC.
Adams allegedly forged deeds, cutting agreements, and documents, paid early investors with later investors’ funds, and convinced investors to roll over their investments. In addition, Adams allegedly promised investors annual returns of 12-15% and he allegedly used investor’s money for personal expenses and to develop an unrelated real estate project.
Madison Timber Properties and Arthur Lamar Adams allegedly managed to defraud at least 150 investors in a $85 million Ponzi scheme. On May 1, 2018, the federal court in Jackson, Mississippi ordered an asset freeze of Madison Timber Properties.
Investors who are concerned they may have suffered a loss in activity related to Frank Zito’s Madison Timber Properties promissory notes recommendations may contact attorney Alan Rosca with any useful information or for a free case evaluation and discussion of recovery options. Call 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
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Frank Zito Was the Subject to One Customer Dispute Disclosure
According to Zito’s FINRA Brokercheck page, Zito was the subject of one customer filed in 2008 alleging misrepresentation of the pioneer diversified income fund. The customer was seeking $140,000 for the alleged damages.
Frank Zito Was Registered with FINRA for 25 Years
Former broker Frank Zito joined the securities in August 1996. He switched employers seven times since then according to his FINRA Brokercheck page:
- Prudential Securities Incorporated (New York, New York)
- August 1996 to March 1998
- Deposit Guaranty Investments
- April 1998 to July 1998
- Invest Financial Corporation (Appleton, Wisconsin)
- July 1998 to February 2000
- AmSouth Investment Services (Jackson, Mississippi)
- February 2000 to February 2007
- Morgan Keegan & Company (Jackson, Mississippi)
- February 2007 to March 2010
- Merrill Lynch, Pierce, Fenner & Smith (Ridgeland, Mississippi)
- March 2010 to July 2018
- Coker & Palmer (Jackson, Mississippi)
- August 2018 to January 2021
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
Potential Recovery Options for Frank Zito Investors
Rosca Scarlato LLC law firm attorneys have years of experience in defending investor loss cases. They often represent victims of Ponzi schemes or broker misconduct and are currently evaluating recovery options for investors who believe they suffered losses as a result of Frank Zito’s involvement in Madison Timber Properties’ Ponzi scheme.
Typically, cases like these are taken on a contingency fee basis. There is no fee or costs if there is no recovery. The firm advances costs and investors are required to pay only if there is a recovery.
Frank Zito customers who are concerned they lost money in connection with Zito’s alleged participation in Madison Timber Properties’ Ponzi scheme or alleged broker misconduct, may contact attorney Alan Rosca for a free, no-obligation evaluation of their recovery options at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this page.
