Securities Lawyers Blog

Broker Eladio Santiago Subject to Customer Complaints Over Investment Recommendations

May 29, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Eladio Santiago (Santiago), currently employed by Cambridge Investment Research, Inc. (Cambridge Investment) 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), Santiago’s customer complaints alleges that Santiago recommended unsuitable investments and account mismanagement among other allegations of misconduct relating to the handling of their accounts.

In February 2020 a customer complained that Santiago violated the securities laws by alleging that from 2014 through the present the broker made unsuitable investments and engaged in mismanagement with respect to recommendations and handling of accounts. The claim is currently pending.

In August 2019 a customer complained that Santiago violated the securities laws by alleging that from November 2012 through October 2018 the broker made unsuitable investments and engaged in mismanagement with respect to recommendations and handling of accounts. The claim is currently pending and alleges $350,000 in damages.

Duff & Phelps Select Energy MLP Fund – Investor Loss Recovery

May 29, 2020 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating investor claims of unsuitable investments in oil and gas related products. Our firm is currently representing a number of investors who lost substantial savings due to poor advice to concentrate holdings in speculative commodities investments like master limited partnerships (MLPs). Duff & Phelps Select Energy MLP and Midstream Energy Fund Inc. (NYSE: DSE) is a mutual fund that invests primarily in MLPs.

In the past year the Duff & Phelps Select Energy MLP has returned a -91% return as of March 31, 2020. In fact, in mid-2015 the fund had a price as high a $14.18 a share and has fallen all the way to a low of $.2 a share.

As a background, MLPs are publicly traded partnerships. About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. There are about 130 MLPs trading on major exchanges that focus on energy related industries and natural resources.

Wall Street loves MLPs because they provide high yields to investors and require companies to pay Wall Street in order to continue to grow. In 2013 banks earned fees of $890.3 million from MLP issuance. Bloomberg quoted an analyst stating that “MLPs are Wall Street’s dream,” because “[t]hey’re fee machines.” Naturally, in order to entice investors to continue to invest in MLPs Wall Street pumps up MLPs every chance they get. According to Bloomberg, in May 2014 “[a]nalysts predict that 93 of the 114 MLPs in existence will rise in value in the next year…” Astonishingly, “all but five MLPs are recommended by the majority of the analysts who cover them.” At that time professionals without conflicts called MLPs “the next great investment debacle” and warned that “many MLP shareholders…may not understand what they’ve gotten into.”

Stifel, Nicolaus Advisor Steven Rodemer Barred From Industry Over Misappropriation of Funds

May 27, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Steven Rodemer (Rodemer) has been accused by his former employer and a financial regulator of taking money from a client account for his personal use among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Rodemer was terminated by his prior employer, Stifel, Nicolaus & Company, Incorporated (Stifel, Nicolaus) concerning his theft and misappropriation of client funds. If you have been a victim of Rodemer’s alleged misconduct our firm may be able to assist you in recovering funds.

In December 2019 Stifel, Nicolaus terminated Rodemer after alleging that he took money from a client account for his personal use without authorization.

Thereafter, in March 2020, FINRA brought a regulatory action and fount that Rodemer consented to sanctions and findings that he refused to provide on-the-record testimony requested by FINRA during its investigation into the conduct disclosed in a Form U5 submitted by his member firm. FINRA determined that the firm submitted the Form U5 terminating Rodemer for taking money from a client account for his personal use without authorization.

Transamerica Advisor Gautam Arora Terminated Over Unapproved Securities Sales

May 27, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Gautam Arora (Arora) has been accused by his former employer engaging in unapproved investments among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Arora was terminated by his prior employer, Transamerica Financial Advisors, Inc. (Transamerica Financial) concerning his promissory note sales. If you have been a victim of Arora’s alleged misconduct our firm may be able to assist you in recovering funds.

In December 2019 Transamerica Financial terminated Arora after alleging that firm received information indicating that the representative solicited various individuals to participate in unapproved investments away from the firm. The firm further alleged that the representative entered into lending arrangements and promissory notes with these individuals without receiving prior approval from the firm.

Arora’s outside business activities disclosed on his publicly available BrokerCheck report include World Financial Group, Inc., Real estate broker, and Keller William Realty.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. 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. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Advisor Robert Buffington Accused of Churning by Multiple Clients

May 26, 2020 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Robert Buffington (Buffington), formerly associated with Aegis Capital Corp. (Aegis Capital), has been subject to at least four customer complaints during his career. Several of those complaints against Buffington concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.

In March 2020 a customer complained that Buffington violated the securities laws by alleging that Buffington engaged in sales practice violations related to unsuitability, breach of contract, and breach of fiduciary duty. The claim is currently pending and seeks $642,224 in damages.

In January 2020 a customer complained that Buffington violated the securities laws by alleging that Buffington engaged in sales practice violations related to unsuitability, churning, common law fraud, breach of contract, and breach of fiduciary duty. The claim is currently pending.

In January 2020 a customer complained that Buffington violated the securities laws by alleging that Buffington engaged in sales practice violations from November 2018 through the date of filing related to unsuitability, churning, common law fraud, breach of contract, and breach of fiduciary duty. The claim is currently pending.

Next Financial Group Advisor Brian Radoo Terminated Over Undisclosed Business Activities

May 26, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Brian Radoo (Radoo) has been accused by his former employer engaging in unapproved outside business activities and by a client for selling a non-approved investment among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Radoo was terminated by his prior employer, Next Financial Group, Inc. (Next Financial) concerning his outside business activities. If you have been a victim of Radoo’s alleged misconduct our firm may be able to assist you in recovering funds.

In April 2020 a customer complained that Radoo violated the securities laws by alleging that Radoo engaged in sales practice violations related to offering the investor an investment in an unapproved outside business activity that involved a cannabis cultivation company. Claimant states that the firm, failed to supervise the representative’s outside business activity. The claim is currently pending.

In December 2019 Next Financial Investments terminated Radoo after alleging that he engaged in unreported, unapproved outside business activities.

Radoo’s outside business activities disclosed on his publicly available BrokerCheck report include Energy Consulting, Legal Cannabis Cultivation, and real estate rental properties.

NYLife Securities Advisor Felix Chu Barred By Regulatory Over Promissory Notes

May 25, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Felix Chu (Chu) was investigated by a securities regulator for selling promissory notes to clients among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Chu left his prior employer, NYLife Securities, LLC (NYLife Securities) prior to several customer complaints concerning the sale of promissory notes. If you have been a victim of Chu’s alleged misconduct our firm may be able to assist you in recovering funds.

In December 2019 FINRA sent Chu requests for information concerning his activities. Chu failed to respond to the requests and was automatically barred from the brokerage industry.

In October 2019 a customer complained that Chu violated the securities laws by alleging that Radoo engaged in sales practice violations related investments beginning in March 2016 until September 2018, she and her late husband were misled into purchasing promissory notes for $305,000. Plaintiff further alleges that they were misled into remitting a check for $75,000 to purchase what they believed to be additional insurance. The claim is currently, pending and the the investors are seeking compensatory damages in excess of $380,000, lost income, interest, punitive damages and attorneys’ fees.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. 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. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Allianz Structured Alpha 1000 Fund – Investor Loss Recovery Options

May 25, 2020 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP are investigating investors who were inappropriately recommended the Allianz Structured Alpha 1000 and Structured Alpha 1000 Plus Funds. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in these speculative and volatile investment offerings. Allianz Global Investors told investors that they are liquidating the two hedge funds after they took heavy losses due to COVID related stock volatility on the portfolios stock-options trades.

The Structured Alpha 1000 and Structured Alpha 1000 Plus apparently had been net buyers of puts, or options giving the holder the right to sell an asset at a predetermined price in the future. These put investments were designed to hedge against losses the funds might endure in a market downturn. However, the strategy did not work and as the market continued declining the funds were forced to lock in losses.

The 1000 in the Structured Alpha Fund names refers to their return targets: 1,000 basis points, or 10 percentage points, above their benchmarks. However, the Funds advertised themselves as relatively safe and stable investments that were specifically designed to perform well during market downturns.

The Funds’ three-pronged investment objective is to (1) profit during normal market conditions; (2) protect against a market crash, hedging against extreme downside market moves; and (3) navigate as wide a range of equity market outcomes as possible. In fact the fund advertised that volatile markets would be beneficial to the strategy and that the higher volatility levels would enable increased outperformance potential and better risk control. The Funds claimed that a protracted bear market is a highly favorable environment for the strategy.

Leveraged ETFs – Loss Recovery Options

May 24, 2020 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP are investigating investors who were inappropriately recommended leveraged exchange-traded funds (ETFs). ETFs, also called exchange-traded notes (ETNs) when backed by a note rather than underlining assets, are speculative and volatile investment offerings.

An ETF is a registered investment trust whose shares represent an interest in a portfolio of securities that track an underlying benchmark or index. Shares of ETFs are typically listed on national securities exchanges and trade throughout the day at prices established by the market. These non-traditional ETFs differ from other ETFs in that they seek to return a multiple of the performance of the underlying index or benchmark or the inverse or opposite performance.

To accomplish their objectives non-traditional and leveraged ETFs typically contain very complex investment products, including interest rate swap agreements, futures contracts, and other derivative instruments. Moreover, non-traditional ETFs are designed to achieve their stated objectives only over the course of one trading session, i.e., in one day. This is because between trading sessions the fund manager for a non-traditional ETF generally will re-balance the fund’s holdings in order to meet the fund’s objectives and is known as the “daily reset.” As a result of the daily reset the correlation between the performance of a non-traditional ETF and its linked index or benchmark is inexact and “tracking error” occurs. Over longer periods of time or pronounced during periods of volatility, this “tracking error” between a non-traditional ETF and its benchmark becomes compounded significantly.

Kayne Anderson MLP/Midstream Investment Company – Investor Loss Recovery

May 19, 2020 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating investor claims of unsuitable investments in oil and gas related products. Our firm is currently representing a number of investors who lost substantial savings due to poor advice to concentrate holdings in speculative commodities investments like master limited partnerships (MLPs). Kayne Anderson MLP/Midstream Investment Company (NYSE: KYN) is a non-diversified, closed-end fund with an investment objective to obtain a high after-tax total return for its shareholders by investing at least 85% of our total assets in energy-related master limited partnerships and in other companies that operate assets used in the gathering, transporting, processing, storing, refining, distributing, mining or marketing of natural gas, natural gas liquids, crude oil, refined petroleum products or coal.

Year to date Kayne Anderson MLP/Midstream Investment Company has returned a -57.97% return as of April 30, 2020.

As a background, MLPs are publicly traded partnerships. About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. There are about 130 MLPs trading on major exchanges that focus on energy related industries and natural resources.

Wall Street loves MLPs because they provide high yields to investors and require companies to pay Wall Street in order to continue to grow. In 2013 banks earned fees of $890.3 million from MLP issuance. Bloomberg quoted an analyst stating that “MLPs are Wall Street’s dream,” because “[t]hey’re fee machines.” Naturally, in order to entice investors to continue to invest in MLPs Wall Street pumps up MLPs every chance they get. According to Bloomberg, in May 2014 “[a]nalysts predict that 93 of the 114 MLPs in existence will rise in value in the next year…” Astonishingly, “all but five MLPs are recommended by the majority of the analysts who cover them.” At that time professionals without conflicts called MLPs “the next great investment debacle” and warned that “many MLP shareholders…may not understand what they’ve gotten into.”