Failure to Supervise

Michael Mackay Terminated Over Unapproved Product Sales – Investor Recovery

May 29, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating multiple claims that advisor Michael Mackay (Mackay) has engaged in the sale products not approved by his brokerage firm. Mackay, formerly registered with Transamerica Financial Advisors, Inc. (Transamerica) out of Cincinnati, Ohio has been accused by at least one customer of engaging in unapproved activity. In addition, Mackay disclosed that he has several tax liens totaling over $50,000.

In January 2019 Transamerica terminated Mackay after alleging that the firm received allegations from two customers that the Mackay had referred them to an outside investment opportunity that was not approved by the firm.

Mackay’s FINRA disclosures state that Mackay has several outside business activities including Mackay & Associates, The Homexchange, and WFG.

James Bylenga Accused of Borrowing Client Funds – Investor Recovery

May 26, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor James Bylenga (Bylenga) has engaged in a loan scheme with clients. Bylenga, formerly registered with LPL Financial LLC (LPL Financial) and operating out of Portage, Michigan, has been accused by a customer of soliciting funds for a loan. Bylenga operated out of the d/b/a firm The Retirement Wealth Management Group while working for LPL Financial.

In April 2019, FINRA brought an action and found that Bylenga consented to sanctions that he refused to produce documents and information requested by FINRA during the course of an investigation that commenced after his former member firm amended his termination reporting form. According to FINRA, LPL Financial’s an internal review determined that Bylenga may have received loans from his clients while associated with the firm.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in loan or misappropriation of asset schemes. The provision of loans, promissory notes, and activities in the sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Advisor Michael Heath Subject to Regulator Complaint and Employment Terminations

December 31, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Michael Heath (Heath), currently employed by Infinity Financial Services (Infinity Financial) has been subject to one regulatory action, two employment terminations for cause, and one civil lien during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the regulatory action against Heath concern allegations of unsupervised record activity.

In October 2018 FINRA alleged that Heath consented to the sanctions and findings that he regularly communicated with his customers through an unapproved personal email account about member firm business and circumvented the firm’s supervision. FINRA found that in these emails Heath sent account documents, discussed account performances, and discussed specific investments with his customers. FINRA further found that the firm’s supervisory procedures required electronic business-related correspondence to be sent through firm issued or firm approved email accounts so that the firm could monitor such communications for recordkeeping and compliance purposes. FINRA determined that by using unapproved personal email account Heath caused his firm to fail to maintain all business-related communications. In addition, FINRA also found that Heath failed to comply with FINRA rules on communications with the public in that he created account performance summaries that he used in meetings with clients that failed to provide a sound basis for customers to evaluate the facts.

In March 2016 Heath was discharged by Securities America, Inc. (Securities America) on allegations that he failed to disclose internal investigation with previous broker dealer on his CRD update.

That disclosure followed Heath’s termination from First Allied Securities, Inc. (First Allied) where the firm terminated him for failing to comply with the firm’s email policies.

Advisor Jeffrey Schwebach Terminated Over Securities Rule Violation

November 13, 2018 | by Staff Attorney

According to BrokerC heck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Jeffrey Schwebach (Schwebach), formerly associated with Independent Financial Group, LLC (Independent Financial) in Dell Rapids, South Dakota was terminated by the firm. In June 2018 Schwebach was discharged after the firm claimed that he failed to accurately describe the nature of his outside business activities (OBAs) and also violated firm policy with regard to disclosure of customer complaint. There are no other public disclosures on Schwebach’s record.

At this time it is unclear the nature or scope of the alleged OBAs and if such activity included private securities transactions. Schwebach’s public disclosures show that he has disclosed numerous OBAs including The Cartwright Bros, a landlord rental business, 50% owner of Schwebach Financial – a d/b/a company. In addition, Schwebach has disclosed he is a radio DJ for Backyard Broadcasting, 50% owner of Dells Mini Storage, 20% owner of Schwebach Family Partnership, and instructor for a retirement course, board member of Planning Life, and a radio DJ ofr Midwest Communications, among other disclosures.

Advisor Philip Nalesnik Terminated Over Outside Business Activity Violations

October 6, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Philip Nalesnik (Nalesnik), formerly associated with LPL Financial, LLC (LPL Financial) in Pottsville, Pennsylvania was terminated by the firm. In July 2018 Nalesnik was discharged after the firm claimed that he was in violation of firm policy regarding outside business activities and failed to timely and completely respond to firm inquiries.

In addition, Nalesnik has several reported tax liens including a $4,573 lien in September 2017 and a $7,847.61 lien in July 2012.

At this time it is unclear the nature or scope of the alleged OBAs and if such activity included private securities transactions. Nalesnik’s public disclosures show that he operated Ridgeview Wealth Management a d/b/a entity. In addition, Nalesnik owned Integrated Insurance Management LLC.

Aeon Capital Broker Wayne Miller Suspended by FINRA for Failure to Supervise

September 19, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating Aeon Capital Inc (Aeon Capital) broker Wayne Miller (Miller). According to BrokerCheck Records held by the Financial Industry Regulatory Authority (FINRA), Miller has been subject to three customer disputes, a regulatory action, and a financial action.

In December 2017, FINRA suspended Miller for failing to properly supervise his firm’s chief compliance officer (CCO) and direct supervisor as the member firm’s president. Miller also failed to respond to red flags that the system of supervision was deficient and that the CCO was not properly supervising the registered representatives of the firm. During the time, a registered representative at the firm was employing an unsuitable “swing trade” strategy by excessively trading mutual fund “A” shares in customer accounts. The CCO informed Miller that one of the registered representatives of the firm was excessively trading mutual fund “A” shares in customer accounts, and Miller did not contact the mutual fund customers – which could’ve led him to learn about 11 of the other affected customers. Miller also failed to properly supervise the CCO – who demonstrated her difficulty with analyzing the firm’s trade blotter and mutual fund switch reports even with the help of a compliance consultant. Consequently, Miller incurred a fine of $10,000 and was suspended for 6 months.

In addition, Miller has been subject to multiple customer complaints. In August 2018, a customer alleged that Miller misrepresented investments, over-concentrated the customer account, breached fiduciary contract and duty, and was negligent with the customer funds. The case was settled at $95,000.

FINRA suspends Chelsea Financial Broker George Warner for Filing Inaccurate Client Records

September 4, 2018 | by Staff Attorney

The investment fraud attorneys at Gana Weinstein LLP are currently investigating Chelsea Financial Services (Chelsea Financial) broker George Warner (Warner). According to BrokerCheck Records, Warner has been subject to a regulatory matter in which the Financial Industry Regulatory Authority (FINRA) sanctioned Warner for the violation of the securities laws. In addition, Warner has been subject to termination from two firms of employment and a customer complaint.

In November 2014, Warner was permitted to resign from NFP Advisor Services for changing customer documents and information after the clients had signed the documents. In June 2013, Warner was discharged from LPL Financial LLC for getting customer signatures on account transfer forms that were blank.

Subsequently, in April 2017, FINRA found that Warner altered customer documents without customer knowledge or permission on over five occasions in which he included customer liquidity needs, net worth, annual income, alternative investment forms, and an IRA application. By altering the firm’s documents, Warner impeded on the firm’s ability to maintain accurate records. Without admitting or denying the findings, Warner consented to the sanctions and to the entry of findings. Consequently, FINRA imposed a $5,000 fine and 30 day suspension.

In addition, Warner has been subject to a customer dispute. In August 2009. a customer alleged that Warner purchased CIT bonds instead of CITI Corp bonds. The case was settled at $225,000.

Gregory Hill Subject to Pending Complaint Over Annuity Sales

August 2, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating Royal Alliance Associates, Inc. (Royal Alliance) broker Gregory Hill (Hill). According to BrokerCheck Records, Hill has been subject to one pending customer dispute and tax lien. In addition, Hill has been subject to termination from employment. The majority of these concerns allege the firm’s failure to supervise.

In August 2017, a customer alleged that Hill’s firm of employment failed to supervise Hill’s inappropriate sale of a variable annuity to the customer. The client has requested $1,185,056 in damages. This dispute is currently still pending.

In addition, in December 2010, ING Financial Partners, Inc. terminated Hill for failing to report his three tax liens on the U4 form. Hill has also been subject to a tax lien. In June 2010, Hill incurred a tax lien of $86,263.

Joseph Pratte Barred By Financial Regulator Over Unapproved Business Activities

July 31, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Joseph Pratte (Pratte), formerly associated with Signator Investors, Inc. (Signator Investors) in Riverside, California was terminated by his firm concerning allegations he engaged in prohibited outside business activity (OBA) and failed to submit the activity to the firm for approval as required.

Thereafter, in May 2018 FINRA sought to question Pratte concerning his OBA. FINRA found that Pratte failed to cooperate with the investigation. Accordingly, FINRA determined that Pratte consented to the sanction and to the entry of findings that he refused to provide information in response to FINRA requests made to review Pratte’s outside business activities.

At this time it is unclear the extent of Pratte’s outside business activities or if private securities transactions were involved. However, Pratte disclosed that he was engaged in a rental property business.

Matthew Kerby Barred by FINRA Over Allegations of Converting Customer Funds

July 30, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP have been investigating previously registered broker Matthew Kerby (Kerby). According to BrokerCheck Records, in January 2018, Kerby was barred from the financial industry by the Financial Industry Regulative Authority (FINRA) for withholding crucial documents from FINRA involving a prior investigation in which Kerby allegedly converted elderly customer funds. Kerby consents to the sanctions that he received FINRA’s request and failed to produce documents. By refusing to provide requested documents, Kerby violated FINRA Rules 8210 and 2010. At this time it is unclear the extent and nature of the appropriation that occurred.

In addition, Kerby has been subject to termination from employment. Kerby’s employer, Edward Jones, terminated Kerby in November 2017 alleging that Kirby misappropriated and converted customer funds to utilize them for personal benefit.

Kerby has also been subject to a customer complaint. In November 2017, a customer alleged that Kerby misappropriated the customer’s funds by taking the money out of the account and converting the funds without customer authorization. The dispute was settled at $78,985.80.