Articles Tagged with unsuitable investments

shutterstock_50740552-300x200Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Howard Brous (Brous) currently associated with Wunderlich Securities, Inc. (Wunderlich) alleging unsuitable investments, common law fraud, and breach of fiduciary duty among other claims.  According to brokercheck records Brous has been subject to six customer complaints, 14 regulatory sanctions, and one employment separation for cause.  The majority of Brous’ regulatory sanctions involve multiple state regulators seeking heightened supervision plans and otherwise restricting Brous’ activities.

In August 2016 a customer filed a complaint stating that they had maintained an account with Brous for over 10 years and that his accounts were over concentrated in unsuitable securities.  The customer alleged damages of $2,500,000.  The claim is currently pending.

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shutterstock_141873055Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor William Ornstein (Ornstein) currently registered with The GMS Group, LLC. (GMS), alleging unsuitable investments, fraud, unauthorized trading, over-conentration, and material misrepresentations among other claims.  According to brokercheck records Ornstein has been subject to nine customer complaints, one regulatory action, and two criminal matters.

In November 2015 a customer filed a complaint alleging that Ornstein made fraudulent sales and over-concentrated the account from 2011 through 2015.  The complaint involves oil and gas related master limited partnership (MLP) investments and municipal debt securities.  The customer is seeking $200,000 in damages.  The claim is current pending.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly.  This obligation includes making only suitable investments for their client.  The suitable analysis has certain requirements that must be met before the recommendation is made.  First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence.  Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors.  Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives.  These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

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shutterstock_143094109The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker James Ignatowich (Ignatowich).  According to BrokerCheck records Ignatowich has been subject to at least nine customer complaints and one regulatory action.  The customer complaints against Ignatowich allege securities law violations that including unsuitable investments and unauthorized trading among other claims.   In addition, the state of New Hampshire filed a complaint against Ignatowich alleging that the broker engaged in unlawful telemarketing and provided inaccurate and misleading information to the state during the course of their investigation.  Ignatowich was sanctioned $87,500 and barred for nine months.

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_158028338The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Heather Weber (Weber).  According to BrokerCheck records Weber has been subject to at least seven customer complaints.  The customer complaints against Weber allege securities law violations that including unsuitable investments and misrepresentations among other claims.

In January 2016 a customer filed a complaint alleging $200,000 in damage stemming from unsuitable investment recommendations from 2012 through 2016.  The complaint is pending.  In September 2015, another customer filed a complaint alleging unsuitable investments causing $475,000 in losses from investments made from 2012 through July 2014.  The claim is pending.

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_176198786The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Lisa Wolf (Wolf).  According to BrokerCheck records Wolf has been subject to at least six customer complaints.  The customer complaints against Wolf allege securities law violations that including unsuitable investments, unauthorized trading, misrepresentations, and excessive trading among other claims.

In April 2015 a customer filed a complaint alleging $364,630 in damage stemming from unauthorized trades and unsuitable investment recommendations from July 2008 through June 2014.  The complaint is currently pending.  In May 2013, another customer filed a complaint alleging unsuitable investments from May 2008 through March 2009 causing $220,000.  The claim settled.

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_70999552The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Roman Reed (Reed).  According to BrokerCheck records Reed has been subject to at least four customer complaints.  The customer complaints against Reed allege securities law violations that including unsuitable investments and unauthorized trading among other claims.

In February 2015 Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) discharged Reed for cause stating that the reason related to the broker’s handling of a customer complaint.  In April 2014 a customer filed a complaint alleging $1,153,803 in damage stemming from the Reed conducting unauthorized trades from March 2011 through January 2014.

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.

The number of events listed on Reed brokercheck is high relative to his peers.  According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records.  Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints.  In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters.  However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck.  More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.

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shutterstock_176284139The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Jesse Griffin (Griffin). According to BrokerCheck records Griffin has been the subject of at least six customer complaints three of which have been filed since 2014. The customer complaints against Griffin allege a number of securities law violations including that the broker made unsuitable investments, fraud, breach of fiduciary duty, and negligence among other claims.

The most recent customer complaint filed in June 2015 alleged unsuitable investments from November 2006 through September 2008. The claim was settled.

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_145368937The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Paul Blum (Blum). According to BrokerCheck records Blum has been the subject of at least eight customer complaints three of which have been filed since 2015. The customer complaints against Blum allege a number of securities law violations including that the broker made unsuitable investments, and excessive trading among other claims.

The most recent customer complaint filed in December 2015 and alleged negligence in recommending the purchase of bonds that defaulted from February 2009 until April 2014 claiming $450,000 in damages. The claim is still pending. In November 2015, another client filed a complaint alleging Blum invested in high yield bonds without consultation between May 2013 and May 2014 resulting in $133,000 in damages. The dispute is currently pending.   In a third complaint filed in November 2015, an investor claimed that Blum invested in appropriate bonds from 2005 through 2015 causing $140,000 in damages. The claim was settled.

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_20354401The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) and the agency’s bar of broker Eugene Smietana (Smietana). According to BrokerCheck records Smietana has been the subject of at least four customer complaints, one employment termination for cause, and four tax liens or judgments. The customer complaints against Smietana allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, and churning (excessive trading) among other claims.

In September 2015, Smietana was barred by FINRA for failing to respond to the regulators requests for information. In addition, Smietana has several sizeable liens and judgments entered against him. Substantial judgements and liens 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.

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_1744162The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Allan Montalbano (Montalbano). According to BrokerCheck records Montalbano has been the subject of at least four customer complaints and one bankruptcy filing. The customer complaints against Montalbano allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, negligence, breach of fiduciary duty, and churning (excessive trading) among other claims.

In November 2015, Montalbano disclosed that he entered bankruptcy. The most recent customer complaint filed in June 2015 and alleged unsuitable recommendations and excessive trading claiming $250,000 in damages. The claim is still pending. In May 2013, another client filed a complaint alleging Montalbano failed to follow instructions. The claim closed.

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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