securities fraud attorney

Advisor Thomas Martin Has Unsuitable Investment Complaints

October 2, 2022 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Thomas S. Martin (Martin), currently employed by Brighton Securities Corp. (Brighton Securities) has been subject to at least two customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Mr. Martin’s customer complaints alleges that Mr. Martin recommended unsuitable investments in various investments securities, among other allegations of misconduct relating to the handling of their accounts.

In January 2020, Mr. Martin was the subject of a regulatory action initiated by FINRA. Mr. Martin consented to the findings and sanctions, of $5,000 in civil and administrative penalties. Mr. Martin neither admitted or denied the findings. Mr. Martin allegedly exercised discretion in customers’ accounts, without prior written authorization from the customers. Additionally, Mr. Martin received written reprimands from his firm, for engaging in such conduct.

In August 2017, a customer complained that Mr. Martin violated the securities laws by alleging that Mr. Martin engaged in unauthorized trading between February 2017 and July 2017. The claim settled in the amount of $8,252.75.

In August 2011, a customer complained that Mr. Martin violated the securities laws by alleging that Mr. Martin engaged in unsuitable investment advice, with regards to the customer’s IRA. Client claimed she deposited money into her IRA with instructions to be placed in the safest account. The IRA is alleged to have lost approximately $7,000, resulting in this customer dispute. The claim settled in the amount of $22,407.33.

Christopher Miller Subject to Investment Customer Complaint

September 1, 2022 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Christopher Miller (Miller), currently employed by Emerson Equity LLC (Emerson Equity) has been subject to at least two customer complaints during the course of his career. One of those complaints appears to have been expunged through FINRA’s notoriously flawed expungement process. According to records kept by The Financial Industry Regulatory Authority (FINRA), Mr. Miller’s customer complaints alleges that Mr. Miller recommended unsuitable investments in various investments including allegations involving private placements and real estate securities, among other allegations of misconduct relating to the handling of their accounts.

In February 2020, a customer complained that Mr. Miller violated the securities laws by alleging that Mr. Miller engaged in financial elder abuse, involving a 1031 exchange investment. The claim alleges $292,000 in damages. This complaint was subsequently expunged from Mr. Miller’s record.

In October 2019, a customer complained that Mr. Miller violated the securities laws by alleging that Mr. Miller engaged in the sale of unsuitable securities, breach of fiduciary duty, and financial elder abuse. The claim settled in the amount of $57,000.

Broker Jonathan Ebel Accused of Excessive Trading and Subject to Tax Liens

April 13, 2021 | by Staff Attorney

Jonathan Ebel, a financial advisor currently employed at Network 1 Financial Securities, Inc. (Network 1 Financial), has been subject to at least one customer complaint during the course of his career. Additionally, Ebel has also been subject to a tax lien. His most recent customer complaint alleges excessive trading and unsuitable trading. According to a BrokerCheck report, in May 2018, Ebel was accused of excessively trading his client’s account and purchasing unsuitable investments. This matter settled for $30,000.00. Additionally, in December 2016, Ebel disclosed a tax lien in the amount of $31,962.00.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typically 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.

Advisor and Broker Ralph Byer Accused of Making Unsuitable Investment Recommendations

April 5, 2021 | by Staff Attorney

Advisor and broker Ralph Byer (Byer), currently employed by Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), has a substantial complaint history. Byer has been subject to at least seven customer complaints during the course of his career. According to a BrokerCheck report, the majority of his customer complaints (four out of seven) concern unsuitable investment recommendations.

In June 2018, a customer alleged Byer engaged making unsuitable investment recommendations and excessive trading from 1990 until 2018. Ultimately this matter settled for $565,000.00. Additionally, from 2001 through 2009, three other known customer complaints were brought against Byer for making unsuitable investments. Moreover, in 1999, a customer alleged Byer engaged in churning. That matter ultimately settled in favor of the client for $22,500.00.

Advisors have an obligation to make only suitable recommendations for investments to the client. There are many investments that are not appropriate for the majority of investors or for certain investors given their risk tolerance, age, and other factors. Advisors should not present these investment options to clients. There are two screens that advisors must employ to determine whether an investment is suitable for a client. First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors. The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one. 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.

Advisor James Parrelly Accused of Churning and Sanctioned By Financial Regulator

August 10, 2020 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker James Parrelly (Parrelly), formerly associated with Investment Planners, Inc. (Investment Planners), has been subject to at least eight customer complaints, three regulatory complaints, and one employment termination for cause during his career. Several of those complaints against Parrelly concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.

In June 2020, Parrelly was terminated by Investment Planners which alleged that at time of his resignation Parrelly was on heightened supervision and was engaging or had engaged in activities in violation of firm policies and/or FINRA rules, including: (1) use of personal email and texts to communicate with firm clients regarding their accounts; (2) failing to abide by terms of his heightened supervision plan (by continuing to use his personal email and texts and by not providing copies of his personal emails and texts to the firm); and (3) unauthorized trading. Parrelly then resigned in response to the anticipated commencement of an internal review into his activities.

In May 2020, FINRA suspended Parrelly finding that he consented to findings that he executed discretionary transactions in the securities account of a customer pursuant to the customer’s prior verbal authorization, but without written authorization from the customer or written approval from his member firm.

In April 2019 a customer complained that Parrelly violated the securities laws by alleging that Parrelly engaged in sales practice violations related to churning, negligence of duty and unsuitable investments. The claim is currently pending and seeks $500,000 in damages.

Transamerica Advisor Gautam Arora Terminated Over Unapproved Securities Sales

May 27, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Gautam Arora (Arora) has been accused by his former employer engaging in unapproved investments among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Arora was terminated by his prior employer, Transamerica Financial Advisors, Inc. (Transamerica Financial) concerning his promissory note sales. If you have been a victim of Arora’s alleged misconduct our firm may be able to assist you in recovering funds.

In December 2019 Transamerica Financial terminated Arora after alleging that firm received information indicating that the representative solicited various individuals to participate in unapproved investments away from the firm. The firm further alleged that the representative entered into lending arrangements and promissory notes with these individuals without receiving prior approval from the firm.

Arora’s outside business activities disclosed on his publicly available BrokerCheck report include World Financial Group, Inc., Real estate broker, and Keller William Realty.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. 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 John Jaramillo Terminated for Selling a Non-Approved Product

May 15, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor John Jaramillo (Jaramillo) has been accused by his former employer of selling a non-approved product among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Jaramillo has been terminated by his prior employer, Western International Securities, Inc. (Western International) concerning his outside business activities. If you have been a victim of Jaramillo’s alleged misconduct our firm may be able to assist you in recovering funds.

In March 2020 Western International terminated Jaramillo after alleging that he sold a non-approved product.

Jaramillo’s outside business activities disclosed on his publicly available BrokerCheck report include accident & health insurance and Integrity Real Estate Solutions which is listed as a real estate agent.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. 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 Ferrell Rollins Terminated for Borrowing Customer Funds

May 14, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Ferrell Rollins (Rollins) has been accused by his former employer of borrowing client funds among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Rollins has been terminated by his prior employer, Capital Investment Group, Inc. (Capital Investment Group) concerning his outside business activities. If you have been a victim of Rollins’ alleged misconduct our firm may be able to assist you in recovering funds.

In September 2019 Capital Investment Group terminated Rollins after alleging violation of firm policy and FINRA Rules 2010 and 3240 related to borrowing money from a customer and making false statements to the firm on forms related to said loan.

Rollins’ outside business activities disclosed on his publicly available BrokerCheck report include Telco Credit Union.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. 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.

Broker Sergio Rovner Subject to Multiple Investment Complaints

September 26, 2019 | by Staff Attorney

The attorneys at Gana Weinstein LLP are currently investigating claims against broker Sergio Rovner (Rovner), currently associated with Aegis Capital Corp. (Aegis) out of New York, New York. According to a BrokerCheck report, Rovner has been subject to at least six customer disputes and two regulatory actions during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the customer complaints against Rovner concern allegations of unauthorized trading, unsuitable investments, and misrepresentations among other claims.

In February 2018 a customer filed a complaint alleging that Son executed unauthorized trades in the customer’s account and made unsuitable investment recommendations. The customer requested $32,398 in damages. The claim settled for $12,635.

In December 2005 FINRA found that Rovner violated NASD Rules 2110 and 2310 by engaging in excessive trading and unsuitable investments. Without admitting or denying the allegations, Rovner consented to the described sanctions and to the entry of the findings. Rovner was fined $10,000 and suspended for 30 days.

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.

Spire Securities’ CEO David Blisk Makes False Statements After Panel Awards $3 Million Against Him

June 22, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP represents a group of 23 claimants that have been awarded $3 million by a FINRA arbitration panel after 18 days of hearing and litigation that stretched over three years. At hearing the evidence showed that Spire Securities, LLC (Spire Securities) and the firm’s principal officers including its CEO David Blisk (Blisk) and CCO Suzanne McKeown (McKeown) failed to supervise their registered representative Patrick Churchville (Churchville).

Despite the overwhelming evidence of the firm’s failure to supervise Blisk continues to defend his conduct instead of instituting necessary reforms to his practice. In addition, Blisk has made several false statements of fact to the media in his continuing attempts to exonerate himself and his firm.

Blisk told AdvisorHub “’We think the award is outrageous and inappropriate,’ said Blisk, noting that the majority arbitrators appeared to ignore the firm’s claims that the Ponzi scheme began after Churchville left Spire in 2011. “We can’t supervise after somebody leaves us, and we don’t have to be fraud investigators.”

False on all counts. First the only thing that is outrageous is that Blisk and Spire Securities could not produce a single opening account form, subscription agreement, or account statement for any of the 23 claimants who invested over $10 million in Churchville’s fraud on Spire Securities watch. Claimants repeatedly asked Respondents to provide any evidence that the firm monitored Churchville’s activities for supervision without response. Blisk had no evidence that Claimants investments, which were overconcentrated in private equity funds, was suitable. Further, Respondents did not even know what Churchville’s funds were invested in and claimed that brokerage firms can blindly approve products that they have no understanding of.

Finally, Blisk falsely claims that Churchville did not commit fraud on Spire Securities watch. Claimants proved that Churchville directed and ordered the theft of over $900,000 from one of the Claimants over Spire Securities’ email servers. In addition, Claimants introduced numerous emails that showed $750,000 had been stolen from the private equity funds while Churchville fraudulently told investors the same investment was producing fantastic returns. Claimants also showed that Chuchville stole over $200,000 in investor funds to pay administrative expenses that had been overdue for over a year after the service provider questioned whether Churchville was going out of business. Finally, Claimants produced evidence that Churchville’s auditor had concerns over the private equity fund’s valuation and could not find evidence to back up Churchville’s claimed returns.