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Former Hendersonville Broker Faces $103K Fine for Misappropriation of Funds

Wednesday, November 22, 2017 | 09:19am

NASHVILLE – The Tennessee Department of Commerce & Insurance’s (TDCI) Securities Division announces disciplinary action against a Hendersonville-based former investment business operator who was found in violation of the state’s securities law.

Andrew J. Ermenc, a Tennessee resident with the last known address of 114 Jefferson Drive in Hendersonville, used investors’ monies for his own gain, misappropriating at least $103,111 of investors’ funds for his and his wife’s personal use. Ermenc first obtained promissory notes from individuals who wanted to invest with him. Then Ermenc promised to use investors’ funds only to invest in the stock market and pay them an unusually high rate of return—18 percent.

Among the court’s findings (which included investors’ testimony), Ermenc failed to disclose to investors that his methods of stock trading could result in a substantial loss of principal and that he was not truthful about the amount of principal remaining for investors, among other details.

A Final Order became effective November 3, 2017 and imposed $103,000 in civil penalties against Ermenc. The order can be found on the TDCI website.

Ermenc’s prior registration with the Securities Division as a broker-dealer agent was terminated on December 16, 2004. He was also previously licensed as an insurance producer in Tennessee until he requested the cancellation of his license in October 2005.

 “Investment fraud committed by a person who was once licensed to help people manage their money is an especially egregious act,” said TDCI Assistant Commissioner for Securities Frank Borger-Gilligan. “The Department takes the state’s securities laws seriously, and we will vigorously pursue lawbreakers on behalf of consumers. We urge consumers to always remember that if a deal sounds too good to be true, it almost certainly is. Investors can contact us if they have questions about what a broker can and cannot do or if they believe they have been the victim of fraud.”

Tennesseans are encouraged to visit the Department’s website where they can inspect disciplinary actions and verify licenses of security and insurance professionals.

For more investor education resources or to schedule an education outreach event for your group/club, visit the TDCI Securities Division at https://www.tn.gov/commerce/section/securities  or call 615-741-2947.

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