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shutterstock_95416924-300x225The investment fraud lawyers of Gana LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Michael Jay Sharenow (Sharenow). Sharenow’s FINRA BrokerCheck record shows several disclosures mainly pertaining to unsuitable investments.

In November 2016, a customer alleged that he or she instructed Sharenow to buy highly rated bonds but Sharenow instead bought two inappropriate securities. This dispute settled in November 2016 for the amount of $8,258.42.

A currently pending case against Sharenow was filed in October 2016 for allegedly over-concentrating a client’s portfolio during the period of 2012 to 2015 while he was employed at Wells Fargo Advisors. The clients claim that the alleged damages are greater than $810,000.00.

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shutterstock_80511298-300x218Broker James Lynn (Lynn) was recently terminated by his former employer Voya Financial Advisors, Inc. (Voya).  According BrokerCheck  Voya alleged that Lynn provided misleading information to the firm during a complaint investigation.  In addition to the termination, Lynn has been subject to six customer complaints, one bankruptcy and three judgments or tax liens.  The securities lawyers of Gana LLP are investigating the customer complaints against Lynn.

Many of the complaints concern variable annuities or direct participation products (DPPs) such as non-traded real estate investment trusts (REITs).  The most recent complaint filed in May 2017 requested $115,000 in damages alleging that the investor claimed the that the REIT investments and the replacement of a variable annuity policy was unsuitable. The REITs were purchased in 2014 and 2015.  The claim is currently pending.

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shutterstock_185190197-300x199The law offices of Gana LLP have recently filed a complaint on behalf of nearly a dozen investors alleging that Dean Mustaphalli (Mustaphalli) engaged in securities fraud.  The claim was brought against brokerage firms Sterne Agee Financial Services, Inc. (Sterne Agee) and Interactive Brokers LLC (Interactive Brokers) alleging that the firms failed to supervise Mustaphalli’s misconduct and otherwise aided his fraud causing them approximately $3,000,000 in losses.

If you unfortunately trusted Mustaphalli with your investments there is still time to act.  Gana LLP’s securities fraud attorneys represent investors who have suffered investment losses at the hands of securities professionals. Details concerning Mustaphalli’s alleged fraud continue to surface.

On June 14th, 2017, New York Attorney General Eric T. Schneiderman announced charges against Mustaphalli and entities he controlled with defrauding elderly clients out of millions of dollars.  The New York Attorney General alleged that Mustaphalli engaged in a six-year scheme to defraud clients that were elderly and near retirement by investing their money in his hedge fund and in many instances without their knowledge  Schneiderman said in a statement – “As we allege, Dean Mustaphalli squandered and looted $10 million from hardworking individuals. New Yorkers deserve to know that their investments are safe—and financial professionals who won’t play by the rules will face consequences.”

According to the complaint, since 2011, Mustaphalli invested 58 New York funds – total of more than $11 million – in his hedge fund and then lost $10 million by engaging in a risky options trading strategy that was not consistent with his clients’ investment profiles and objectives.  The complaint also alleges that Mustaphalli took an additional $100,000 from his hedge fund to pay for his own personal expenses.

The fund performed horribly losing $6.6 million or 92% in 2012 alone.  By December 2014, the fund’s historical performance was 97.6%, – practically a total loss. When clients complained about losses, Mustaphalli provided false and misleading reasons to blame such as market conditions in oil and because of the election.  Other investors were promised that the fund would stabilize.

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shutterstock_22722853-300x204Broker Tom Parks (Parks) has been subject to a massive number of customer complaints alleging many millions in damages.  Parks was associated with Ameriprise Financial Services, Inc. (Ameriprise) until April 2016.  According BrokerCheck the customer complaints largely involve claims of unsuitable investments in oil and gas, variable annuities, and REITs.  In particular, many of the complaints mention master limited partnership (MLPs).  In total, 23 customers have brought complaints involving Parks’ actions.  In addition, Ameriprise terminated Park stating that Parks was permitted to resign while the broker was on heightened supervision for violations of company policy related to suitability, client disclosure, and outgoing correspondence issues.  The securities lawyers of Gana LLP continue to investigate the customer complaints against Parks.

Our clients tell us similar stories that their advisors hyped MLPs and other oil and gas investments as high yielding investments without significant discussion of risk.  In a recent Associated Press article, common stories of how investors are pitched by their financial advisors on oil and gas private placements were reported on. Often times these products are pitched as ways to ride the boom in U.S. oil and gas production and receive steady streams of income.

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shutterstock_178565714-300x200Gana LLP is investigating new customer complaints filed with the Financial Industry Regulatory Authority (FINRA) against broker Aaron Robert Parthemer (Parthemer). Our firm has been investigating Parthemer since 2015, when Parthemer was barred from FINRA for engaging in private securities transactions, also known as “selling away”. According to FINRA’s BrokerCheck records for Parthemer, there are 4 new disclosures on his record since his last regulatory action in 2015. These disclosures including customer complaints against Parthemer alleging unsuitable and unauthorized investments, and misrepresentation. Parthemer was barred permanently from FINRA on April 2015. His registration to the New Jersey Bureau of Securities, a self-regulatory organization, was revoke in September 2015.

The most current customer complaint pending against Parthemer is from May 2017, alleging Parthemer made unsuitable investments starting in 2009 when Parthemer was employed at Wells Fargo Advisors and Morgan Stanley Smith Barney. During Parthemer’s stint at Morgan Stanley, the client alleged that Parthemer presented outside investment opportunities that he had a personal interest in, which was unauthorized by the firm. The customer alleged damages of $1,622,844.00.

A second customer complaint was submitted in September 2016 regarding Parthemer’s actions while employed at Morgan Stanley Smith Barney. The customer alleged that Parthemer solicited the client to invest in outside investments that were not authorized by Morgan Stanley. The alleged damages are $205,000.00 and is still pending.

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shutterstock_177577832-300x300The securities lawyers of Gana LLP are investigating customer complaints and a FINRA enforcement action with The Financial Industry Regulatory Authority’s (FINRA) against broker Henry Watson (Watson). According to BrokerCheck records, Watson has been subject to three customer complaints and one FINRA action. The customer complaints against Watson allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, portfolio mismanagement, and excessive trading among other claims.

The most recent claim was filed in October 2016 alleging Watson purchased shares of a security from without authorization seeking $13,017.  Subsequently in January 2017 FINRA barred Watson for failing to appear to testify concerning an arbitration claim.  FINRA claimed that the testimony was requested in connection with an inquiry into an arbitration claim filed by a customer against Watson.  FINRA alleged that Watson acknowledges that he received FINRA’s request but would not appear for on-the-record testimony at any time resulting in the bar.

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shutterstock_138129767-300x199The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Margaret Lech-Loubet (Lech-Loubet).  According to BrokerCheck records Lech-Loubet has been in the securities industry for 25 years and has two customer complaints on her record.  Lech-Loubet is currently registered with UBS Financial Services, Inc. (UBS) out of the firm’s Beverly Hills, California office location.  The most recent customer complaints against Lech-Loubet alleges that Lech-Loubet concentrated the client in energy related structured products and master limited partnerships (MLPs).

The most recent complaint was filed in January 2017 and alleged that from June 2014 to November 2015 the investments were not suitable and were told the investments were safer than equities.  The customer is claiming $285,582 in damages.  The claim is currently pending.

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shutterstock_182004416-300x200Broker John Oldham (Oldham) was recently sanctioned by The Financial Industry Regulatory Authority (FINRA) in an enforcement action.  According to the FINRA AWC (Letter of Acceptance, Waiver, and Consent 2015046203101) FINRA found that Oldham consented to sanctions that he shared commissions from the sales of alternative investments with an unregistered entity. According to FINRA, Oldham facilitated the sales of the alternative investments totaling more than $4.8 million to customers referred to him and shared commissions with the unregistered entity in the amount of $240,000 for these transactions.  FINRA found that while Oldham executed subscription agreements on behalf of the third-party, in some instances this representation on those forms were inaccurate because Oldham had not communicated with the customer who had executed the subscription agreement.

The securities lawyers of Gana LLP are investigating the regulatory complaint against Oldham.  In addition to the regulatory action, there is one employment termination for cause listed for Oldham alleging possible violation of FINRA Rule 2040.

Our firm often handles cases involving direct participation products (DPPs) and private placements including oil and gas partnerships, non-traded real estate investment trusts (REITs), and other alternative investments.

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shutterstock_114128113-300x238The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Craig Sutherland (Sutherland) currently associated with Money Concepts Capital Corp (Money Concepts). According to BrokerCheck records, Sutherland has been subject to seven customer complaints. The customer complaints against Sutherland allege a number of securities law violations including that the broker made unsuitable investments, breach of fiduciary duty, and negligence among other claims.

Several of the claims involve allegations of high risk investments in Tanzania Royalty Exploration, variable annuities, non-traded REITs such as American Realty Capital Healthcare, and oil and gas related investments.  Variable annuities and non-traded REITs are high risk investments that brokers often sell to generate large commissions to the detriment of their clients.

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shutterstock_158028338-300x298The securities lawyers of Gana LLP are investigating customer filed with The Financial Industry Regulatory Authority’s (FINRA) against current The O.N. Equity Sales Company (O.N. Equity) broker Richard Wesselt (Wesselt). Wesselt operates his securities practice under an d/b/a entity called Wesselt Capital Group.  According to BrokerCheck records, Wesselt has been subject to seven customer complaints over the course of his career and one termination for cause. The most recent customer complaint against Wesselt occurred in August 2016 and alleged that sale of variable annuity and life insurance were unsuitable.  The claim alleged damages of $25,709 and settled.

Variable annuities are complex financial and insurance products.  The Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing.  A variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you.  The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen.  The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

However, the benefits of variable annuities are often outweighed by the terms of the contract that include exorbitant expenses such as surrender charges, mortality and expense charges, management fees, market-related risks, and rider costs.  Brokers often solicit these products to earn lucrative up front commissions even when the product is inappropriate for the investor.  In addition, some brokers will attempt to flip or switch annuities every couple of years which has the effect of further denying the investor of benefits while increasing commissions to the broker.

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