Selling Away

Advisor Kieth Baron Sanctioned By Regulator Over Undisclosed Securities Dealings – Investor Recovery Options

February 11, 2024 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Kieth Baron (Baron) has been accused by The Financial Industry Regulatory Authority (FINRA) of engaging in undisclosed outside business activities (OBAs) and private securities transactions. According to records kept by FINRA, Baron was last employed by Equity Services, Inc. (Equity Services) through January 2022. According to BrokerCheck, Baron has 11 disclosures on his record including two regulatory actions, two financial disclosures, one employment termination, and six customer complaints. If you have been a victim of Kieth’s alleged misconduct our firm may be able to assist you in recovering funds.

According to FINRA, Baron was named in a FINRA complaint alleging that he made material misrepresentations to investors in connection with his recommendation of a Company stock. The FINRA complaint alleges Baron failed to disclose to the couple that he was a consultant for the Company. FINRA is also claiming that Baron later made additional material false statements to an investor in connection with a buyback of the couple’s shares of the Company.

The complaint also alleges that Baron had an ongoing business relationship with Company A. Baron expected to receive compensation and received $284,890 in compensation from Company A. FINRA found Baron failed to provide prior written notice to his member firm concerning his business relationship with Company A. The complaint further alleges that Baron participated in private securities transactions by recommending investors purchase 4,348,000 shares of Company A’s common stock for $359,806. According to FINRA, Baron failed to provide written notice to his firm of his role in the sale of Company A’s common stock prior to participating in the sale.

Brian Egan Barred By FINRA for Trading in Accounts Away From His Firm

January 25, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating a complaint filed by The Financial Industry Regulatory Authority (FINRA) against Brian Egan (Egan) formerly associated with Independent Financial Group LLC (Independent Financial) alleging that the broker failed to disclose his trading activity in client accounts away from the firm. According to brokercheck records Egan has been subject to one employment termination for cause by Independent Financial in July 2015 for failing disclose personal trading in accounts away from the firm.

In August 2016 FINRA sanctioned Egan alleging that he consented to the entry of findings that Egan maintained and/or held trading authority in a total of 87 brokerage accounts for himself and over 60 customers at another brokerage firm. The customer accounts over which he held trading authority included both Egan’s family members and customers of his CPA business. FINRA found that Egan did not notify Independent Financial of his involvement in these accounts when he became associated with the firm, or at any other time. FINRA found that Egan exercised his trading authority in the accounts at the other firm to execute trades and to transfer funds and securities from certain of the customer accounts to his own accounts.

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. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

FINRA Bars Former NYLife Broker Jonathan Williams Over Outside Business Activities

September 29, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought and enforcement action against broker Jonathan Williams (Williams) (FINRA No. 20150452689) resulting in a bar from the securities industry alleging that Williams failed to provide FINRA staff with information and documents requested. The failure to provide those documents and information to FINRA resulted in an automatic bar from the industry. FINRA’s document requests related to the regulators investigation into claims the Williams falsified certain bank records and potentially commingled client funds in a bank account under his control.

FINRA’s investigation appears to stem from Williams’ termination from NYLife Securities LLC (NYLife) in March 2015. At that time NYLife filed a Form U5 termination notice with FINRA stating in part that the firm discharged Williams under circumstances where there was allegations that Williams commingled client funds. It is unclear the nature of the outside business activities from publicly available information at this time. However, from the three customer complaints filed against Williams potentially relating to these activities, the clients allege that Williams sold those customers CDs that were issued by Mid-Atlantic Financial and that the funds used to purchase these CDs were withdrawn from accounts with NYLife.

Williams entered the securities industry in 2000. From February 2006, until April 2015, Williams was associated with NYLife out of the firm’s Timonium, Maryland office.

FINRA Bars Former Merrill Lynch Broker Michael Highfill Over Outside Business Activities

September 28, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought and enforcement action against broker Michael Highfill (Highfill) (FINRA No. 2015045652501) resulting in a bar from the securities industry alleging that Highfill failed to provide FINRA staff with information and documents requested. The failure to provide those documents and information to FINRA resulted in an automatic bar from the industry. FINRA’s document requests related to the regulators investigation into claims the Highfill solicited and accepted a loan from an elderly customer and that he also failed to disclose an outside business activity to his member firm.

FINRA’s investigation appears to stem from Highfill’s termination from Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) in May 2015. At that time Merrill Lynch filed a Form U5 termination notice with FINRA stating in part that the firm discharged Highfill under circumstances where there was allegations that Highfill solicited a loan from a client and failed to disclose outside business activities. It is unclear the nature of the outside business activities from publicly available information at this time.

Highfill entered the securities industry in 1999. From August 2005 until August 2008, Highfill was associated with Morgan Stanley & Co. Incorporated. Thereafter, from July, 2008, until May 2015, Highfill was associated as a registered representative with Merrill Lynch out of the firm’s Ridgeland, Mississippi office.

Broker Spotlight: Claims Against Former AXA Advisors Broker Dennis Lee

September 11, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Dennis Lee (Lee) has been the subject of one customer complaint, four financial disclosures, and one employment separation. The customer complaint against Lee alleges that the broker made unsuitable investments, transferred funds to a new account without the client’s knowledge or consent, engaged in unauthorized trading, and submitted forged documents. The client alleges over $1,000,000 in damages due to the misconduct. Approximately two months after disclosing the customer complaint AXA Advisors, LLC (AXA) terminated Lee. The termination was for cause and stated that Lee was discharged for failing to disclose financial issues that required the broker to file a U4 amendment, mismarking trade tickets, and placing securities trades away from the firm, otherwise referred to as “selling away.”

Lee entered the securities industry in 1993 and since that time Lee has been associated with AXA until his termination in April 2015.

Advisers have an obligation to deal fairly with investors and that obligation includes 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 costs, 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.

FINRA Bars Former LPL Financial Broker Thomas Caniford From the Industry

September 4, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) barred former LPL Financial LLC (LPL) broker Thomas Caniford (Caniford) after the broker failed to respond to a letter from the regulator requesting information. While BrokerCheck records kept by FINRA do not disclose the nature of the regulatory inquiry, in February 2015, Caniford was terminated by LPL for cause stating that the broker was terminated for 1) having custody and control of client funds in a bank account in violation of firm policy; and 2) failure to provide bank records requested by the firm.

In addition, Caniford has been the subject of at least two customer complaints and four financial liens all tax related. The customer complaints against Caniford allege a number of securities law violations including that the broker made investments in products not approved by LPL, also referred to as “selling away”, and direct theft and misappropriation of funds.

Caniford entered the securities industry in 1982. From March 2004, until March 2008, Caniford was associated with M Holdings Securities, Inc. Thereafter, from March 2008, until his termination in March 2015, Caniford was associated with LPL.

JP Turner Broker Homer Vining Suspended for Failing to Comply with an Arbitration Award

July 29, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Homer Vining (Vining) has been the subject of at least one customer complaint and three regulatory actions. The customer complaint against Vining alleges a number of securities law violations including that the broker made misrepresentations concerning penny stocks and a claim of investment sold away from the firm among other claims.

Vining entered the securities industry in 1991. From 2005 through August 2009, Vining was associated with Ameriprise Advisor Services, Inc. Thereafter, from August 2009, until March 2015, Vining was associated with J.P. Turner & Company, L.L.C. (JP Turner).

Vining has three regulatory actions against him. The first is a suspension by FINRA for failing to comply with an arbitration award. The second is also a suspension by FINRA for failing to comply with an arbitration award. The third regulatory action is by the state of Georgia which suspended Vining until the broker comes into good standing with FINRA.

New York Attorney General Arrests Advisor Frederick Monroe On Charges of Running a Ponzi Scheme

July 25, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Frederick Monroe (Monroe) has been the subject of at least three customer complaints alleging that the broker misappropriated funds. In total the customers complaint that over $2 million has been taken by the broker. Subsequently, Monroe’s brokerage firm, Voya Financial Advisors (Voya Financial), terminated Monroe due to the allegations. Monroe had been associated with Voya Financial since 2006.

On June 10, 2015, Attorney General Eric T. Schneiderman announced the arrest of Monroe and charging him with stealing over $1 million from investors by fraudulently soliciting them to reinvest their retirement monies in what essentially was a Ponzi scheme. Monroe was accused of luring clients that he provided services to as a financial planner by diverting their monies for his own personal use and paying back earlier investors he had defrauded. Monroe faces up to 25 years in prison.

The New York Attorney General also stated that while the current charges pertain to three victims the investigation has identified at least a dozen individuals who Monroe allegedly defrauded. According to the Attorney General’s felony complaint, Monroe’s fraud was carried by instructing investors to write checks to him personally and then deposited them into his personal operating account. Monroe is alleged to have advertised his services on the Capital Financial Planning, LLC website to “clients who have amassed a significant level of assets and seek to take advantage of advance advisory programs.”

Gana LLP Investigation: George Montgomery’s Sales of Twin Peak Investment

July 13, 2015 | by Staff Attorney

According to news reports, broker George Montgomery (Montgomery) committed suicide but questions surrounding the death left many believing that foul play was involved. Montgomery, a former ASU running back, before injuries took him off the field.

Montgomery became a registered broker in 1998. From 2005 until October 2011, Montgomery was associated with United Planners’ Financial Services of America (United Planners). Thereafter, from January 2012 until July 2013, Montgomery was associated Fortune Financial Services, Inc. (Fortune Financial).

Montgomery was found July 31, 2014, submerged in Wet Beaver Creek by two hikers with a handgun next to the dead man. When police inspected the scene, investigators found that there were four gunshot wounds and two had penetrated the Montgomery’s chest while there were also a hand wound and one leg also wound.

Regulators File Complaints Against Christopher Veale Concerning His Securities Practices

June 8, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Christopher Veale (Veale) has been the subject of at least 12 customer complaints, six judgment and lien of over $1,000,000 and five separate regulatory actions, two investigations by state regulators and one criminal matter involving a felony over the course of his career. Customers have filed complaints against Veale alleging a litany of securities law violations including that the broker made unsuitable investments, unauthorized trades, breach of fiduciary duty, misrepresentations and false statements, churning, and fraud, among other claims. Many of the claims involve recommendations in penny stocks and other speculative securities.

An examination of Veale’s employment history reveals that Veale moves from troubled firm to troubled firm. The pattern of brokers moving in this way is sometimes called “cockroaching” within the industry. See More Than 5,000 Stockbrokers From Expelled Firms Still Selling Securities, The Wall Street Journal, (Oct. 4, 2013). In Veale’s 18 year career he has worked at 18 different firms.

Since 2008 Veale has been registered with Maximum Financial Investment Group, Franklin Christopher Investment Bankers, Inc., Brookville Capital Partners, Blackwall Capital Markets, Inc., Meyers Associates, L.P., John Thomas Financial, and Legend Securities, Inc., until February 2015.