Securities Lawyers Blog

Financial Advisor Gregory Williams Subject to Nine Investment Complaints

September 21, 2021 | by Staff Attorney

Advisor Gregory Williams (Williams), formerly employed by brokerage firm Forta Financial Group, Inc. (Forta Financial) has been subject to at least nine customer complaints. According to a BrokerCheck report several of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In April 2021 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2013 and February 2021. The claim involves alternative investments and alleges $30,000 in damages and is currently pending.

In October 2020 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2014 and September 2020. The claim involves alternative investments and alleges $250,000 in damages and is currently pending.

In October 2020 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws likely between March 2012 and September 2020. The claim involves alternative investments and alleges $99,000 in damages and is currently pending.

Horizon Private Equity III Ponzi Scheme Victims – Investor Recovery

September 20, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are currently representing investors who have been the victim of the Horizon Private Equity III, LLC (Horizon) scam. Recently, the SEC has alleged that approximately 400 investors in Horizon were defrauded in a Ponzi scheme fashion out of over $110 million. A number of Oppenheimer & Co. Inc. (Oppenheimer) advisors were involved in the scam including Horizon’s chief architect and mastermind John J. Woods (CRD# 1949233) and his families members including broth James Wallace Woods Jr. (CRD# 734272), and cousin Michael Jeremiah Mooney (CRD# 4037101).

Woods and his cohorts used and abused their trusted positions as financial advisors to solicit Horizon to their clients making claims that Horizon was a safe investment that generated 6-7% guaranteed returns, had a guaranteed rate of return, carried little risk and were extremely safe and conservative, and that the Horizon investment was sponsored or offered by Oppenheimer. In reality, Horizon was a fraudulent venture that repaid old investors with funds raised from new investors. Horizon had few to no risk disclosures and failed to provide investors with information as to the nature of the funds’ holdings or other information that investors should have been provided with. When the SEC investigated Horizon III, the regulator found that by July 2021, Horizon III had liquid assets worth less than $16 million and had only invested $20 million in dubious small real estate projects.

Our firm is representing clients who have alleged that Oppenheimer permitted Woods and his co-conspirators to perpetrate this fraudulent scheme while turning a blind eye to numerous signs of fraud. Our firm’s investigation has revealed that Woods has been under almost continuous litigation concerning his outside business activities since at least 2007. Further, Oppenheimer was subpoenaed to produce documents and records relating to Woods’ outside business dealings in at least on litigation where Woods was accused of defrauding an investor to provide capital for one of Woods’ many businesses. In addition, court records reveal that Woods stated under oath that his failed business ventures left him personally liable for loans totaling over $6 million.

Seth Stewart Has Customer Complaints Over Alternative Investments

September 20, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Seth Stewart, currently employed by Brookstone Financial and formerly employed by Center Street Securities, Inc. (Center Street), has been subject to at least two customer complaints during his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Stewart’s customer complaints allege that Stewart recommended unsuitable investments in illiquid alternative investments – a high risk investment category.

In February 2020, a customer complained that Stewart violated the securities laws by alleging that Stewart engaged in unsuitable investment advice. The claim alleges $200,000 in damages and is currently pending.

In December 2019, a customer complained that Stewart violated the securities laws by alleging that Stewart was unaware that certain investments he made were illiquid. The claim alleges $100,000 in damages and is currently pending.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors.

Former Morgan Stanley Advisor Ken Hutkin Terminated For Undisclosed Activities

September 15, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Kenneth Hutkin, currently employed by Wedbush Securities Inc., (Wedbush) has been subject to at least five customer complaints during his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Hutkin’s customer complaints allege that Hutkin recommended unsuitable investments, engaged in churning, overcharged certain corporate security debts, and engaged in unapproved outside business practices.

In February 2020, a customer complained that Hutkin violated the securities laws by alleging that Hutkin engaged in unsuitable investment advice. The claim does not specify any amount with respect to damages. However, the complaint was denied.

In September 2018, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unapproved outside business activities, including payments for some such activities. Hutkin was terminated by his employer, Morgan Stanley, for these allegations.

In October 2008, a customer complained that Hutkin violated securities laws by alleging that Hutkin overcharged certain corporate debt securities. The claim settled in the amount of $52,958.

In June 1993, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unsuitable investment advice and churning. The claim settled in the amount of $23,000.

In June 1992, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unsuitable investment advice and churning. The claim settled in the amount of $130,000.

Raymond James Advisor Eric Bachinsky Has Several Disclosed Customer Complaints

September 15, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that broker Eric Bachinsky (Bachinsky), currently employed by Raymond James & Associates, Inc. (Raymond James) has been subject to at least five customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Bachinsky’s customer complaints alleges that Bachinsky recommended unsuitable investments in various investments.

In March 2020, the attorney for a customer’s estate complained that Bachinsky violated the securities laws by alleging that Bachinsky engaged in unsuitable investments. The damage amount requested was $228,465.26. The damages were denied.

In November 2011, a customer complained that Bachinsky violated the securities laws by alleging that Bachinsky engaged in negligence, misrepresentation, breach of contract, and breach of fiduciary duty. The damage amount requested was $80,000. The claim settled in the amount of $24,000.

Advisor Kevin Meadows Accused of Excessive Trading and Unsuitable Investment Advice

September 14, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that broker Kevin Meadows (Meadows), most recently associated with IBN Financial Services, Inc. (IBN Financial Services) has been subject to at least five customer complaints and two regulatory actions during the course of his career. Meadows has been recently barred by FINRA from acting as a broker. According to records kept by The Financial Industry Regulatory Authority (FINRA), Meadows’s customer complaints alleges that Meadows recommended unsuitable investments in various investments among other allegations of misconduct relating to the handling of their accounts, including churning customer accounts.

In April 2020, a customer complained that Meadows violated the securities laws by alleging that Meadows recommended unsuitable investments and failed to repay a loan. Further, the claim alleged that Meadows engaged in failure to supervise, excessive trading, and breach of fiduciary duty. The damage amount requested was $168,000. The claim settled in the amount of $35,000.

In March 2006, a customer complained that Meadows violated the securities laws by alleging that Meadows engaged in unauthorized trading and use of margin in customer accounts. The damage amount requested was $135,481.71. The matter was settled in a voluntary mediation, without going through arbitration/litigation. The claim settled in the amount of $50,000.

Broker Peter Steege Has 21 Disclosable Events – Investor Recovery

September 14, 2021 | by Staff Attorney

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor Peter Steege (Steege) has at least 21 disclosable events. Such events include one criminal matter, four regulatory disclosures, two employment terminations for cause, and 14 customer complaints alleging that Steege engaged in some form of investment related misconduct in the handling of the client’s accounts. Steege is currently employed by Western International Securities, Inc. (Western International). Steege’s customer complaints alleges that Steege recommended unsuitable investments, made misrepresentations, and overconcentrated investments relating to the handling of client accounts.

In January 2021 a customer complained that Steege violated the securities laws by alleging that Steege made unsuitable investments resulting in losses in the amount of $163,000 in the account. The claim is currently pending.

In November 2020 a customer complained that Steege violated the securities laws by alleging that Steege made unsuitable investments and overconcentrated the account resulting in losses in the amount of $5,000 in the account. The claim is currently pending.

In November 2020 a customer complained that Steege violated the securities laws by alleging that Steege made unsuitable investments resulting in losses in the amount of $50,000 in the account. The claim is currently pending.

James Couture Accused of Misappropriating Client Funds – Investor Recovery

September 13, 2021 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor James Couture (Couture) has converted customer funds among other allegations. According to BrokerCheck records, Schmidt is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm LPL Financial LLC (LPL Financial) out of the firm’s Worcester, Massachusetts office location. In addition, Couture disclosed two customer complaints, one employment terminations for cause, and two regulatory actions. If you have been a victim of Couture’s alleged misconduct our firm may be able to assist you in recovering funds.

In June 2020 LPL Financial terminated Couture alleging that he had altered identifying information, account balances and distributions in customer account statement, maintained comingled customer funds, use of an unapproved email address. Thereafter, FINRA investigated these claims but Couture refused to comply with the agency’s requests.

In June 2021 the SEC alleged that Couture violated his fiduciary duty to his clients by engaging in a deceptive scheme to misappropriate approximately $2.9 million from them. According to the SEC, Couture fraudulently prompted his clients to sell portions of their securities holdings in order to fund large money transfers to an entity that he owned and controlled. The SEC alleges that once Couture used the fraudulently obtained authorizations to secure the sale of client securities and transfers of the proceeds to his exclusive control, Couture then spnt the money for his own benefit. Couture went so far as to lull clients into believing that their sale proceeds had been actually reinvested by providing them with fabricated account systems and account holding reviews. The SEC found that the fabricated statements contained securities transactions that never happened, investments that did not exist, and earnings that the clients never received for the purposes of creating the false appearance that Couture had reinvested his clients’ money.

Michael Lackwood, Spring Delta Advisor, Accused of Unsuitable Investments

September 13, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Advisor Michael Lackwood (Lackwood), currently employed by Spring Delta Asset Management, LLC (Spring Delta) has been subject to at least one customer complaint and one employment termination for cause during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Lackwood’s customer complaint alleges that Lackwood recommended unsuitable investments in various investments including allegations involving risky and speculative securities, among other allegations of misconduct relating to the handling of their accounts.

In May 2019, a customer complained that Lackwood violated the securities laws by alleging that Lackwood did not follow the customer’s instructions to sell. The complaint further alleged that Lackwood engaged in unsuitable investment advice, negligence, breach of fiduciary duty, and fraud. Lastly, the complaint alleged that Lackwood engaged in misrepresentations related to risky and speculative securities. The claim settled in the amount of $115,000.

Brokers are required under the securities laws to treat their clients fairly. This obligation includes the duties to disclose material risks of the investments they recommend and to present products, particularly complex or confusing products, in a fair and balanced manner that allows the client to evaluate the recommendation. Another important obligation advisors have is 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 John Howard Has Unsuitable Investment Complaints

September 12, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that advisor John Howard (Howard), currently employed by Raymond James & Associates, Inc. (Raymond James) has been subject to at least three customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Howard’s customer complaints alleges that Howard recommended unsuitable investments in various investments including allegations involving unauthorized trading among other allegations of misconduct relating to the handling of their accounts.

In September 2019, a customer complained that Howard violated the securities laws by alleging that Howard engaged in breach of fiduciary duty, negligence, breach of contract, and violated several other securities laws. The claim settled in the amount of $97,500.

In March 2008, a customer complained that Howard violated the securities laws by alleging that Howard engaged in unauthorized purchase of commercial paper. The claim settled in the amount of $1,134,601.00.

In February 2005, a customer complained that Howard violated the securities laws by alleging that Howard conducted unauthorized trades. The claim alleges settled in the amount of $7,859.83.