Broker took Red Bank woman's money for himself

A broker has been barred from selling securities in part for using the investment of a Red Bank resident for meals at restaurants, health insurance premiums and travel, a regulatory agency has ruled.

Ronald Rafaloff also guaranteed the investor against losses and made false statements to his employer, violating Financial Industry Regulatory Authority rules, FINRA said.

The case stems from a 74-year-old pharmacist who is identified in FINRA documents by her initials, CR, and invested $405,000 with Rafaloff. The lawyer for CR, Richard DeVita, said his client lives in Red Bank.

Rafaloff told CR he invested $340,000 in three companies and promised annual returns of 30 percent to 40 percent, according to FINRA. But CR was the only investor; none of the companies had enough money to cover what was promised; and one of the companies was formed by Rafaloff and his son about one week before the client's initial investment.

CR received $120,500 from February 2011 and December 2012, but she stopped receiving payments in January 2013, the agency said.

Meanwhile, Rafaloff used at least $168,000 for personal expenses that included meals at Manhattan restaurants and purchases at retail stores, according to the documents.

Rafaloff, of Ridgewood, New York, couldn't be reached for comment. He worked at Liberty Partners Financial Services LLC based in Bakersfield, California. A woman answering the phone there said the firm had no comment.

FINRA said Rafaloff didn't disclose to Liberty that he was part-owner of an outside company, violating one of the authority's rules. Liberty terminated Rafaloff in March 2013, according to the documents.

FINRA ordered that Rafaloff be permanently barred from associating with a FINRA-registered firm.

Michael L. Diamond; 732-643-4038; mdiamond@app.com