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shutterstock_143094109-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Philip Sparacino (Sparacino) has been subject to at least two customer complaints, three debt liens or judgements, and one criminal matter during his career.  Sparacino is currently employed by First Standard Financial Company LLC (First Standard Financial) but has worked for a total of six firms during his 11 year career.  One of the customer complaints against Sparacino concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.

In December 2018 a customer filed a complaint alleging that Sparacino violated the securities laws including churning and unsuitable trading causing $90,198 in damages.  The claim is currently pending.

In September 2016 a customer filed a complaint alleging that Sparacino violated the securities laws including unsuitable trading, breach of fiduciary duty, and unauthorized trading causing $38,084 in damages.  The claim is currently pending.

Sparacino also has three debts including a $3,774 lien from March 2017.  The fact that a broker cannot manage his own personal finances is material information for a client to consider.  In addition, the types of products clients have alleged were unsuitable are high commission products that may be recommended to generate high profits for the advisor at the expense of the client.

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shutterstock_180412949-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Yousuf (Joe) Saljooki (Saljooki) has been subject to at least seven customer complaints, two regulatory actions, two employment terminations for cause, and one debt lien or judgement during his career.  Saljooki is formerly employed by Worden Capital Management LLC (Worden Capital) but has worked for a total of nine firms during his 12 year career.  The customer complaints against Saljooki concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.

In July 2018 FINRA suspended Saljooki after he failed to respond to the regulator’s requests for information.

In April 2018 Saljooki was discharged from Worden Capital for failing to disclose and outstanding tax lien to the State of Arkansas during the application process for registration with the state.

In February 2018 a customer filed a complaint alleging that Saljooki violated the securities laws by engaging in churning, unsuitable investments, and fraud.  The claim alleged $523,930 in damages.  The claim settled for $50,000.

In December 2017 SW Financial discharged Saljooki after the firm alleged that Saljooki opened a branch office under another name without the permission of the firm in violation of FINRA Rule 3270.  The firm also accused him of violating Reg S-P by obtaining client information.

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shutterstock_174352538-300x198According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Leonard Boccia (Boccia) has been subject to at least three customer complaints during his career.  Boccia is currently employed by UBS Financial Services Inc. (UBS).  One of the customer complaints against Boccia concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.

In December 2018 a customer filed a complaint alleging that Boccia violated the securities laws including that from 2016 to 2018 Boccia traded their accounts excessively and unsuitably, exercised discretion in their accounts without proper authority, and charged commissions that were not disclosed and/or misrepresented to them causing $1,000,000 in damages.  The claim is currently pending.

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shutterstock_103681238-300x300Advisor Daniel Davila (Davila), formerly employed by Purshe Kaplan Sterling Investments (Purshe Kaplan) and currently employed by advisory firm Austin Walth Management, LLC (Austin Wealth) has been subject to at least two customer complaints.  According to a BrokerCheck report some of the customer complaints concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In October 2017 a customer filed a complaint alleging that Davila violated the securities laws by recommending non-traded REIT and private placement investments that were unsuitable in 2010 through 2011.  The claim alleged $1 million in damages and settled for $670,000

Our firm often handles cases involving direct participation products, Non-Traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments.  These products are almost always unsuitable for investors.  In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments which provides a perverse incentives by brokers to create an artificial market for products that no honest advisor would sell.

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shutterstock_189302963-300x194According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Mitchell Bloom (Bloom), formerly associated with Cetera Advisor Networks LLC (Cetera), and operating under the d/b/a name Bloom Financial, LLC was terminated by Cetera in November 2017.  Bloom was accused by Cetera of violating firm’s policies and the representative participated in a private securities transaction and engaged in an outside business activity without the firm’s prior approval.

Thereafter in February 2019 FINRA barred Bloom from the securities industry.  FINRA alleged that Bloom consented to the sanction and to the findings that he refused to appear for FINRA on-the-record testimony in connection with its investigation of the reasons for the termination of his employment from Cetera.  FINRA found that Cetera had filed a Form U5 stating that in violation of the firm’s policies he participated in a private securities transaction and engaged in an outside business activity without the firm’s prior approval.  Bloom’s failure to respond to FINRA drew an automatic bar from the industry.

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”.  At this point is unclear what securities or business activities Bloom was engaged in.  His public disclosures state that he was engaged in Bloom Life, LLC selling annuities and Alterna Card Services – a sales and marketing company.

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shutterstock_188631644-300x225According to BrokerCheck records financial advisor Raymond Menna (Menna), currently employed by Planmember Securities Corporation (Planmember Securities) has been subject to at least two customer complaints and one regulatory complaint.  According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Menna’s customer complaints allege that Carver made unsuitable recommendations.

In August 2018 FINRA brought a complaint against Menna who consented to sanctions and to findings that he improperly shared in the losses of a customer. FINRA found that the value of the account of one of Menna’s customers declined to zero as a result of customer withdrawals and trading losses and Menna agreed to give the customer money on a monthly basis. Thereafter, FINRA found that Menna made monthly cash payments to the customer totalling approximately $15,000.  FINRA found that Menna did not obtain prior written authorization from his member firm or the customer to make such payments.

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shutterstock_143179897-300x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Dean Grant (Grant), formerly associated with M Holdings Securities, Inc. (M Holdings), and operating under the d/b/a name Dean Grant Financial and GFG Strategic Advisors was arrested in February 2019 on charges of fraud.  Grant’s company purportedly offers financial and estate planning, life insurance, retirement planning, charitable giving, disability and long-term care.  In addition, Grant has three tax liens totaling approximately $150,000.

Grant purportedly turned himself in after an investigation by the Georgia Insurance Commissioner’s Office showed he used nearly $600,000 from at least three clients for his personal gain.  Yet, Grant apparently did not obtain any insurance investments with the money.  Grant was charged with three counts of insurance fraud, three counts of theft by taking, one count of forgery and two counts of trafficking of an elder person. Authorities claim that clients made checks made out to Dean Grant Financial and then he made checks made out to Dean Grant himself taking the money.

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_143179897-300x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Kristian Gaudet (Gaudet), formerly associated with Ameritas Investment Corp. (Ameritas) in Cut Off, Louisiana has been terminated by the firm for using client funds for personal use.  Thereafter, in January 2019, Gaudet consented to the sanction and findings that he refused to appear for and provide FINRA on-the-record testimony concerning the internal investigation by Ameritas that Gaudet was found to have utilized client funds for personal use. Accordingly, Gaudet was barred by FINRA from the securities industry.

According to newsources, Gaudet arrested for stealing nearly $1 million from his clients.  Gaudet was a former vice president of the Greater Lafourche Port Commission and owner of Kris Gaudet Insurance and Financial Services.  Authorities received a complaint form a couple that found issues with a $350,000 investment made to “Winston Financial” in 2012.  Authorities claim that the money was used for purposes other than the investment purposes for which it was intended.  Authorities also accused Gaudet of using funds received in May from another couple to buy a home in Larose.  Gaudet has been accused of frequently using money he received from investors for personal gain including using money clients paid for insurance to buy real estate.

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shutterstock_103681238-300x300The law offices of Gana Weinstein LLP continue to report and update investors on their investigation into GPB Capital Holdings (GPB Capital).  The firm currently represents multiple clients who have been recommended GPB Capital by brokers who were paid large commissions to sell the investment.

GPB Capital has been plagued with issues since last year when the firm stopped raising new money, lost an auditor, and engaged in a lawsuit with a former business partner Patrick Dibre (Dibre).  GPB Capital complained that Dibre reneged on the sale to GPB Capital of certain auto dealerships causing the fund to lose $40 million according to GPB’s complaint.  Dibre counterclaimed that GPB Capital is nothing more than “a very complicated and manipulative Ponzi scheme.”  Then it was reported that the Financial Industry Regulatory Authority Inc. (FINRA) and the Securities and Exchange Commission (SEC) launched investigations in to GPB Capital.

Now, according to newsources, GBP Capital is being investigated by the FBI who made an unannounced visit to GPB Capital’s offices in early March 2019.  None of this information is good news for investors who relied upon the due diligence efforts of their brokers in agreeing to invest in GBP Capital offerings.

Brokerage firms are unfortunately all too willing to subject their clients to the risks of investing in GPB due to the hefty fees and commissions these firms earn.  When GPB Capital’s Automotive portfolio raised a total of $369.2 million from more than 3,800 investors it paid out $43.4 million, or 11.75%, in commissions.  7% of that amount goes directly to the recommending broker’s pocket.  There are as many as 60 brokerage firms that sold these funds and among the largest of those firms are Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp. and Woodbury Financial Services Inc.

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shutterstock_155271245-300x300The securities lawyers of Gana Weinstein LLP recently filed a complaint on behalf of a client alleging that Laidlaw & Company (UK) Ltd. (Laidlaw) recommended the investor purchase a micro cap stock underwritten by the firm in violation of the securities laws.  According to newsources and public filings Laidlaw has been involved in the fraudulent promotion of numerous small and micro cap stocks to their clients in violation of their duties to their clients to disclose conflicts of interests.  These violations also include potentially facilitating pump-and-dump schemes.

Recently, one of Laidlaw’s clients, Barry Hoing (Hoing), was charged by The Securities and Exchange Commission (SEC) for generating $27 million through a “classic pump-and-dump scheme.” The SEC’s allegations focus on stocks including BioZone Pharmaceuticals (now Cocrystal Pharma) (COCP), MGT Capital (OTC: MGTI), and MabVax Therapeutics (OTC: MBVX).   However, other public filings reveal Hoing was also involved in other stocks including Riot Blockchain (RIOT), PolarityTE (PTE formerly COOL), and Marathon Patent Group (MARA).  In addition, Laidlaw was involved in other securities offerings including Aethlon Medical, Actinium, Boston Therapeutics, 5G Investment, Alliaqua, Aspen Group, Brazahav Resources, Fusion Telecoms International, Protea Biosciences Group, Aeolus Pharmaceuticals, Medovex Corp, Relmada Therapeutics, Sevion Therapeutics, Spectrascience, and Spherix.

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