Articles Posted in Unauthorized Trading

shutterstock_155045255The securities lawyers of Gana LLP are investigating a customer complaint filed with The Financial Industry Regulatory Authority (FINRA) against broker Charles Laubach (Laubach).  According to BrokerCheck records Laubach has been subject to at least four customer complaints and two employment separations for cause.  The customer complaints against Laubach alleges securities law violations that including unauthorized trading among other claims.

In February 2015, Laubach was terminated by Ameriprise Financial Services, Inc. (Ameriprise) on allegations that Laubach violated company policies by soliciting certain equity securities and mismarking trade tickets.  In March 2016 Laubach was terminated by Chapin Davis Investments (Chapin Davis) for mis-marking transactions tickets and failure to follow written supervisory procedures.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  Advisors are also not allowed to engage in unauthorized trading.  Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b).  These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

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shutterstock_27786601The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Larry Wolfe (Wolfe). According to BrokerCheck records, Reda has been subject to nine disclosures including eight customer complaints and one employment termination for cause. The customer complaints against Wolfe allege a number of securities law violations including that the broker made unsuitable investments, fraud, unauthorized trading, and omissions of material information among other claims.

In December 2015, brokerage firm Herbert J. Sims & Co. Inc. (Herbert J. Sims) terminated Wolfe for cause alleging that the broker exercised discretion, in a non-discretionary account, in making trades for an account without speaking with client before trades in violation of firm policies among other causes for the broker’s termination.

The most recent customer complaint was filed In May 2016 claims $1,500,000 in damages and alleges seriously-egregious broker and broker/dealer misconduct upon the client including unauthorized trading, unsuitable investment recommendations, fraudulent misrepresentations and omissions of material information, violation H.J Sims policies and procedures.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors.  Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

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shutterstock_184430498The securities lawyers of Gana LLP are investigating customer complaints against broker Barry Jin (Jin).  There are at least three customer complaints against Jin.  The customer complaints against Jin allege a number of securities law violations including that the broker made unauthorized trading among other claims.

Advisors are not allowed to engage in unauthorized trading.  Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b).  These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

One of the firm’s Jin was registered with, Aegis Capital Corp. (Aegis), has been identified as brokerage firm that employs troublesome brokers.  According to a recent study conducted by the Securities Litigation and Consulting Group entitled “How Widespread and Predictable is Stock Broker Misconduct?” the incidents of investor harm at Aegis is extraordinarily high.  The study ranked Aegis as the worst brokerage firm finding that brokers at the firm had over a 35% misconduct rate.  The study stated that investors should stay away from Aegis “Given their coworkers’ disclosure record as of 2014, 83.7% of the brokers at these six firms would be in the highest risk quintile as defined in the FINRA study and should be avoided by investors. The BrokerCheck reports for most of the brokers at these six firms should prominently display a skull and crossbones warning.”

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shutterstock_177577832The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Zak Shapiro (Shapiro).  According to BrokerCheck records Shapiro has been subject to at least four customer complaint, 11 financial disclosures, and 1 employment separation.  The customer complaints against Shapiro allege securities law violations that including unsuitable investments and unauthorized trading among other claims.

In February 2016 a customer filed a complaint alleging unsuitable investments and unauthorized trade occurred in or about September 2014.  The complaint has been denied.  Shapiro has disclosed 11 financial matters.  Substantial financial disputes on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services.  A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  Advisors are also not allowed to engage in unauthorized trading.  Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b).  These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

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shutterstock_102242143The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Lance Shaw (Shaw).  According to BrokerCheck records Shaw has been the subject of at least eight customer complaints and one criminal matter.  The customer complaints against Shaw allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, and churning (excessive trading) among other claims.

The most recent complaint was filed in August 2015 and alleged that the customer’s account was traded without authority.  The complaint is currently pending.  Also in August 2015 another customer complained that unauthorized trading occurred causing $26,874 in damages.  The complaint is pending.  A third complaint also filed in August 2015 makes similar allegations that allegedly caused $56,166.  This complaint has been settled.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time.  Often times the account will completely “turnover” every month with different securities.  This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades.  Churning is considered a species of securities fraud.  The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions.  A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements.  Certain commonly used measures and ratios used to determine churning help evaluate a churning claim.  These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

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shutterstock_43547368The securities fraud lawyers of Gana LLP are investigating the regulatory action filed (Disciplinary Action No. 2014043025701) by The Financial Industry Regulatory Authority’s (FINRA) against broker Carlos Benavidez Jr (Benavidez). According to the allegations, between January 2013 and January 2015, Benavidez exercised discretion in 80 customer accounts without obtaining prior written authorization from the customers while with brokerage firm Waddell & Reed.

FINRA found that beginning in or about December 2009, Benavidez and two other representatives registered with Waddell & Reed, formed RBR Group and shared a customer base for their securities business. Between January 2013 and January 2015, FINRA found that Benavidez exercised discretion in effecting hundreds of securities transactions in approximately 80 customer accounts without obtaining written authorization from his customers or Waddell & Reed’s approval.

Also according to FINRA, Benavidez tried to hide the evidence of unauthorized trading by falsifying documents. FINRA found that on or about September 9, 2014, Benavidez and another individual with the firm backdated approximately 26 customer notes that had been created in the firm’s computer program in order to falsely reflect that Benavidez or another member of the RBR Group had conversed with those customers on before the trades were effected when, in fact, it was not until six days later when Benavidez or another individual talked with the 26 customers about the trades that had been effected in their accounts.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

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shutterstock_138129767The securities lawyers of Gana LLP are investigating customer complaints against broker Leon Vaccarelli (Vaccarelli). The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2014042302001) against Vaccarelli. In addition, there are at least two customer complaints against Vaccarelli and two judgements or liens. The customer complaints against Vaccarelli allege a number of securities law violations including that the broker misrepresented investments and mismanaged the account among other claims.

In a FINRA regulatory action against Vaccarelli, the agency alleged that between 2011 through 2015 Vaccarelli exercised discretion in four customers’ accounts. FINRA found that Vaccarelli exercised discretion even though he did not have written authorization from the customers to place discretionary trades. In addition, Vaccarelli’s brokerage firm had not approved and accepted the accounts as discretionary. FINRA also found that on four annual compliance questionnaires between 2011 and 2014, Vaccarelli falsely certified that he did not handle any customer accounts on a discretionary basis.

Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

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shutterstock_1832893The securities lawyers of Gana LLP are investigating customer complaints against broker Clarence Mark Tingle (Tingle). In addition, The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2014042951501) against Tingle. There are at least 2 customer complaints against Tingle and 1 regulatory action. The customer complaints against Tingle allege a number of securities law violations including that the broker made unauthorized trading, excessively traded accounts, and failed to follow instructions among other claims.

The most recent customer complaint was filed in October 2014 and alleges excessive trading from September 2011 through July 2014 causing $40,954 in damages.

In a FINRA regulatory action against Tingle, the agency alleged that between August 2009 and June 2014, Tingle at times exercised discretion in the accounts of six customers without first obtaining the customers’ written authorization. Although the customers orally authorized the use of discretion Tingle failed to obtain their written authorization in violation of industry rules.

Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

Tingle entered the securities industry in January 1995. Since that time Tingle has been registered with Morgan Stanley out of the firm’s Rehoboth Beach, Delaware office location.

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shutterstock_102757574According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Robert Yasnis (Yasnis) has been the subject of 3 customer complaints, and 3 regulatory actions. The customer complaints against Yasnis allege securities law violations that claim unauthorized trading among other claims. The most recent complaint was filed in June 2015, and alleged $34,350 in losses due to unauthorized trading in May 2011.

The most recent regulatory action was taken by the state of Florida in 2013, when the state alleged that a material false statement was made on an application for registration resulting in a denial of registration. In 1997, the state of Virginia alleged that Yasnis offered unregistered securities in the state and received a fine. Finally in 1994, the state of Texas revoked Yasnis’ securities license in the state due to allegations that he misled the state concerning the status of registration within the state.

Yasnis entered the securities industry in 1993. From February 2007, until July 2009, Yasnis was associated with Hallmark Investments, Inc. From November 2009, until April 2010, Yasnis was associated with Stephen A. Kohn & Associates, Ltd. Thereafter, from April 2010, until October 2012, Yasnis was associated with Buckman, Buckman & Reid, Inc. From October 2012, until January 2014, Yasnis was associated with Meyers Associates, L.P. Presently, Yasnis is associated with Laidlaw & Company (UK) Ltd. out of the firm’s New York, New York branch office location.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.

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shutterstock_186468539The Financial Industry Regulatory Authority (FINRA) sanctioned (FINRA AWC No. 2013039506601) broker Gregory Gassoso (Gassoso) on allegations that in April 2013, Gassoso effected three unauthorized transactions in a customer’s account, resulting in a loss of approximately $1,500. In addition to FINRA’s recent action Gassoso has been the subject of at least five customer complaints and two other regulatory matters over the course of his career. Customers have filed complaints against Gassoso alleging securities law violations including that the broker made unsuitable investments, unauthorized trades, and poor investment advice among other claims.

Gassoso entered the securities industry in 1997. From September 2001, until June 2012, Gassoso was a registered representative with DPEC Capital, Inc. (DPEC). From August 2012, until January 2015, Gassoso was associated with National Securities Corporation. Finally, from February 2015 until September 2015, Gassoso was again associated with DPEC out of its New York, New York office location.

Gassoso has a disciplinary history including prior regulatory claims of unauthorized trading. Gassoso has been the subject of two prior FINRA disciplinary actions for unauthorized activity including a May 2003, action where he was fined $5,000 and suspended from association with a FINRA for ten days for opening accounts for customers without their knowledge or authorization. In another incident in June 2005, Gassoso was fined $6,000 and suspended for 60 days from association with a FINRA member for unauthorized trading in customer accounts.

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