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shutterstock_172399811-297x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Jerry Guttman (Guttman), operating under the d/b/a Guttman Financial Group, in November 2017, was barred from the financial industry by FINRA concerning allegations that he sold more than $7,000,000 worth of membership interests in at least six different limited liability companies to 38 customers without proper disclosure.  FINRA found that Guttman participated in the sales of these membership interests by soliciting the membership interests to investors; communicating with investors about their investments; drafting, distributing, and collecting the investment agreements; collecting and depositing investors’ checks into the companies’ bank accounts; and managing the companies as one of only two managing members.

Guttman’s employer, United Planners Financial Services of America (United Planners) discharged Guttman in September 2017 alleging that Guttman offered unapproved investments.

At this time it is unclear the extent and scope of Guttman’s securities violations and outside business activites.  However, Guttman’s CRD lists a number of outside business activities and companies that may be vechiles for his fundraising activities.  Guttman is involved with Walled Lake Properties – a condo rental property, Serenity Management, LLC – a cemetery business, Leasing USA – commercial property rental company, Sofa Society for Financial Awareness as a consultant, Nationwide Planning & Benefits (NPB Solutions) – the marketing and sale of insurance products, Leasing USA II – a commercial property rental company, Champion Entertainment Group, LLC – a company that records TV songs, 92nd Street Holdings – a commercial property rental company, and Total Living Plan, LLC – estate planning company.

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shutterstock_77335852-300x225According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Joseph Cotter (Cotter) has been subject to two customer complaints, two employment terminations for cause, and one regulatory action.  Cotter was formerly registered with Next Financial Group, Inc. (Next Financial).  In March 2016 Next Financial terminated Cotter claiming that the firm conducted an internal review of the trading activity in a customer’s accounts and found the level of trading activity to be excessive (excessive trading) in light of the customer’s profile and the character of the account.

Thereafter, FINRA investigated Cotter and found that Cotter engaged in excessive, unsuitable trading in the accounts of one customer. FINRA found that Cotter exercised de facto control over an IRA account and a second account of a customer.  FINRA determined that Cotter used this control to excessively trade the accounts in a manner that was inconsistent with the customer’s investment objectives, financial situation, and needs.  The trading generated commissions of $100,549 while the client lost $391,893.

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shutterstock_140321293-200x300The Securities and Exchange Commission (SEC) filed a civil action charging Matthew Griffin and William Griffin with fraudulently offering two Texas oil and gas partnerships – Payson Petroleum 3 Well 2014.  The SEC alleges that between November 2013 and July 2014 the Griffins conducted a fraudulent offering of interests raising $23 million from approximately 150 investors for the purpose of developing three oil and gas wells.  The SEC claims that the Griffins misled investors about Payson’s promised participation in the program and other aspects of Payson’s compensation as the program’s sponsor and operator.

According to the SEC, the Griffins authorized offering materials containing numerous misrepresentations and omissions including: i) that Payson would contribute an up-front 20% of the offering amount in the amount of $5.4 million and that this capital infusion would cover 20% of the cost of the wells; ii) that Payson’s consideration as program sponsor/operator/co-investor would be limited to 20% of any petroleum revenue generated by the wells; and iii) that Payson would cover any cost overages beyond the estimated $24 million.

The SEC found these representations to be false because Payson contributed no money to the offering and paid nothing toward the well costs and moreover Payson lacked the financial means to pay even the smallest cost overage.  The program later declared bankruptcy.

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shutterstock_143094109-300x200According to BrokerCheck records financial advisor William Heiden (Heiden), employed by Wedbush Securities Inc. (Wedbush), has been subject to nine customer complaints.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Heiden has been accused by a customers of unsuitable investment advice concerning various investment products including energy stocks including master limited partnerships (MLPs).  The law offices of Gana LLP continue to report on investor related losses and potential legal remedies due to recommendations to investor in oil and gas and commodities related investments.

The most recent claim was filed in June 2017 and alleges that Heiden, breach his fiduciary duty, committed violation of industry rules, and financial elder abuse causing $855,299.  The customer’s accounts were maintained at the firm from September 2013 to April 2017.  The claim is currently pending.  The broker has stated in defense of the claim that market conditions and the collapse of oil prices in 2014 and 2015, resulted in a loss of value of some stock and bond positions in the customer’s account.

In January 2017 a customer alleged that Heiden, that from March 2012 to February 2016, made unsuitable investments in the client accounts causing $950,718 in damages.  The claim is currently pending.

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shutterstock_26269225-300x200According to BrokerCheck records financial advisor Coleman Devlin (Devlin), formerly associated with IFS Securities (IFS), has been subject to 14 customer complaints.  In addition, Devlin has been subject to two regulatory matters and has been terminated by two firms for cause.  In June 2016 Devlin was discharged from Stifel, Nicolaus & Company, Incorporated (Stifel, Nicolaus) on allegations of unauthorized trading.  Thereafter, The Financial Industry Regulatory Authority (FINRA) conducted its own investigation of Devlin’s trading activities.

In October 2017, FINRA found that Devlin effected discretionary trades in five customer accounts without obtaining prior written authorization from the customers and without acceptance of the accounts as discretionary by his member firm.

Devlin has also been subject to numerous customer complaints over the course of his career.  The most recent case was filed in November 2017 and alleged unsuitable investments.  The customer seeks $600,000 in damages and the claim is currently pending.

In May 2017 another customer filed a complaint alleging that Devlin made unsuitable and unauthorized investments from September 2013 through June 2016.  The claim was settled for $95,000.

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shutterstock_102242143-300x169According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Donald Devito (Devito) has been subject to 10 customer complaints.  Devito was formerly registered with Wells Fargo Advisors (Wells Fargo).  In December 2016 Wells Fargo terminated Devito claiming that the firm had concerns over the level of trading in client accounts.  In 2016 through 2017 Devito has had six complaints filed against him concerning the level of trading and fees generated in his accounts.  Customers have filed complaints alleging a number of securities law violations including that the broker engaged in churning (excessive trading), unauthorized trading, and unsuitable recommendations among other claims.

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shutterstock_180968000-300x200According to BrokerCheck records financial advisor George Warner (Warner), currently associated with Chelsea Financial Services (Chelsea Financial), has been subject to one customer complaint, one regulatory action, and two terminations for cause.  According to records kept by The Financial Industry Regulatory Authority (FINRA), in June 2013, LPL Financial LLC (LPL Financial) terminated Warner for cause alleging that he obtained client signatures on black account transfer forms.  Thereafter, Warner was terminated from NFP Advisors Services (NFP Advisors) under similar circumstances.  NFP Adviosrs claimed in November 2014 that Warner corrected client documents after the client had signed them.

In April 2017, FINRA sanctioned Warner stated that Warner altered various customer documents on at least five occasions after the documents had already been signed by the customers. FINRA found that Warner corrected or included the customer’s anticipated liquidity needs, net worth, liquid net worth, and/or annual income on new account forms, alternative investment disclosure forms, and an IRA application.

Often times, brokers change client information or have clients sign documents in blank in order to use false information to purchase products that the client is otherwise not qualified to purchase.

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shutterstock_185582-300x225According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Kenneth Jones (Jones), in May 2017, was terminated by his firm, Aegis Capital Corp. (Aeigs Capital) based on allegations that Jones was under investigation for failure to disclose outside business activities.  Subsequently, Jones was barred from the industry by FINRA after FINRA requested documents and information and he failed to provide the FINRA requested documents and information.  FINRA sought documents concerning the circumstances surrounding Jones’s termination from his member firm and of certain municipal bond trades that Jones performed while registered with the firm.

At this time it is unclear the extent and scope of Jones’ outside business activities or if they involve private securities transactions.  Jones’ CRD lists that he is engaged in insurance an outside business activity at the Mather Christian Church.  Often times undisclosed outside business activities can lead to private securities transactions.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.

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shutterstock_101456704-300x197According to BrokerCheck records financial advisor Martin Stevens (Stevens), currently associated with Stifel, Nicolaus & Company, Incorporated (Stifel Nicolause), has been subject to seven customer complaints.  According to records kept by The Financial Industry Regulatory Authority (FINRA), in August 2017 a customer filed a complaint alleging that Stevens conduct breached his fiduciary duty, negligence, unsuitable investments, violations of Arizona’s Securities Fraud Statute, negligent misrepresentation, and breach of contract among other claims.  The customer seeks $249,000 in damages and the claim is currently pending.

Also in August 2017 another customer filed a complaint alleging unsuitable investments causing $34,719 in damages.  The claim is currently pending.

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shutterstock_187532306-300x200According to BrokerCheck records financial advisor Robert Hoffmann (Hoffmann), formerly associated with Thurston, Springer, Miller, Herd & Titak, Inc. (Thurston, Springer), has been subject to two customer complaints, one regulatory action, and one tax lien.  According to records kept by The Financial Industry Regulatory Authority (FINRA), in January 2017 a customer filed a complaint alleging that Hoffmann made unsuitable investments, unauthorized trading, and churning among other claims.  The claim seeks $3,200,000 in damages and is currently pending.

In September 2017, FINRA sanctioned Hoffmann stated that Hoffmann consented to the sanctions and to the entry of findings that he willfully failed to amend his Form U4 to timely disclose an unsatisfied Internal Revenue Service (IRS) tax lien filed against him.  In addition, there is one tax lien disclosed on Hoffmann’s report for $106,991 filed in December 2014.  Tax liens and judgements are material information for an investor to consider for several reasons.  A broker with large unpaid debts may be tempted to recommend high commission products and services to satisfy their personal debts.  In addition, a broker’s inability to manage their own finances is material in a customer’s decision to retain the advisor’s services.

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