Axiom Capital Broker John Lemak Named in $475K Private Placement Arbitration

Private placements can offer appealing returns, but for many investors, they come with risks that are neither obvious nor fully explained. When brokers fail to disclose those risks or recommend complex products without ensuring suitability, it can lead to serious losses and legal consequences.

John S. Lemak (CRD#: 845891), a registered broker with Axiom Capital Management in New York, is currently the subject of a pending Financial Industry Regulatory Authority (FINRA) arbitration alleging unsuitable recommendations and violations related to a private placement investment. The claim seeks $475,000 in damages and raises important questions about oversight and investor protection.

Pending Arbitration Involving Alleged Private Placement Misconduct

In July 2024, a customer filed a FINRA arbitration claim (Case #24-01418) against John Lemak, alleging a breach of fiduciary duty, violations of federal securities laws and FINRA rules, and professional negligence. The dispute centers around a private placement product, an illiquid, high-risk investment typically offered to accredited investors.

The claimant is seeking $475,000 in damages, and as of now, the case remains pending. While Lemak has not publicly responded to the allegations, the nature of the claim underscores the ongoing regulatory scrutiny over complex, non-traded investments.

This is not the first complaint involving Lemak. In 2021, he was named in a separate customer dispute alleging $100,000 in damages due to misrepresentation and failure to disclose key risks related to a private placement. That complaint was later withdrawn, but it highlights a pattern of concern involving similar types of investment products.

Employment History and Licensing

John Lemak has been registered with Axiom Capital Management, Inc. since 2015 and is also affiliated with Sandor Advisors, LLC in Dallas, Texas. His securities industry experience dates back to the late 1970s, with prior registration at firms including Morgan Keegan & Company and WFG Investments.

According to FINRA, Lemak holds active licenses in nine U.S. states and territories and is currently approved to act as a General Securities Representative and an Investment Banking Representative. He has passed six securities industry exams, including the Series 7 and Series 79, but does not hold any principal or supervisory licenses.

Why Private Placements Are Risky

Private placements are investments in securities not registered with the U.S. Securities and Exchange Commission (SEC). They’re often pitched as exclusive opportunities to invest in private companies, hedge funds or real estate ventures, but they come with substantial risk.

Key issues include:

• Illiquidity: Private placements usually can’t be sold easily and may require investors to hold the investment for years without any income or the ability to cash out.
• Limited Oversight: These products lack the transparency of publicly traded securities, making it difficult for investors to gauge performance or risk.
• High Commissions: Brokers may receive substantial commissions for selling private placements, which can create a conflict of interest if they recommend products that are not well suited to a client’s financial situation.

Because of these risks, FINRA Rule 2111 requires brokers to evaluate the suitability of any recommendation and ensure it aligns with the investor’s objectives, risk tolerance and liquidity needs.

What Investors Should Watch For

If you’ve been offered or invested in a private placement or similarly complex product, keep an eye out for the following warning signs:

• The investment was described as “safe,” “guaranteed” or “low risk.”
• You were not fully informed of the potential downsides, holding period or fees.
• You are unable to access your funds or liquidate your investment.
• Your broker discouraged you from asking questions or provided vague responses.
• You’ve received notice of an arbitration or lawsuit involving your advisor or investment.
• You’ve seen unexplained or unauthorized transactions in your account.

If any of these red flags apply to your situation, it may be time to consult a securities attorney.

How Sonn Law Group Can Help You Recover Investment Losses 

Sonn Law Group is actively reviewing claims involving broker John Lemak and the sale of potentially unsuitable private placements. If you experienced losses after working with Lemak, you may have grounds for financial recovery.

Our firm has over 30 years of experience representing investors in FINRA arbitration and securities litigation. Led by nationally recognized attorney Jeffrey Sonn, we’ve helped clients nationwide recover millions in losses due to broker misconduct and product misrepresentation.

We offer free, confidential case evaluations and work entirely on a contingency basis, meaning you pay nothing unless we secure a recovery for you.

Contact us today to discuss your options and determine if you have a claim.