Securities Lawyers Blog

Michael Burkoff Has Investor Complaint Over Structured Products Sales

June 30, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Michael Burkoff (Burkoff), currently employed by National Securities Corporation (National Securities) has been subject to at least four customer complaints and one criminal matter during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Burkoff’s one of customer complaints alleges that Burkoff recommended unsuitable investments in various investments such structured products among other allegations of misconduct relating to the handling of their accounts.

In December 2019 a customer complained that Burkoff violated the securities laws by alleging that Burkoff engaged in sales practice violations related to unsuitable trading and breach of fiduciary duty relating to the sale of structured products. The claim alleges $150,000 and is currently pending.

In August 2015 a customer complained that Burkoff violated the securities laws by alleging that Burkoff engaged in sales practice violations related to poor advice. The claim was denied by the firm.

Structured products range in risk from benign to extreme. However, most structured products produce inferior risk/return profiles than ordinary debt or equity instruments because the brokerage firms that issue these products seek to profit from the spread between the payment to investors and the amount of money the brokerage firm can make from the issuance. When dealing with some of the more complex structured products most investors will lack the ability to understand the merits of investments nor are many structured products appropriate for investors seeking a fixed or reliable income and preservation of capital.

Advisor Robert Gianchiglia Has Customer Complaints Over Private Placements and Alternative Investments

June 30, 2020 | by Staff Attorney

Advisor Robert Gianchiglia (Gianchiglia), currently employed by USA Financial Securities Corporation (USA Financial) has been subject to at least six customer complaints and two criminal complaints during the course of his career. 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 November 2019 a customer complained that Gianchiglia violated the securities laws by alleging that Gianchiglia engaged in sales practice violations related to misrepresentations in the sale of private placement. The claim alleges $200,000 and is currently pending.

In March 2017 a customer complained that Gianchiglia violated the securities laws by alleging that Gianchiglia engaged in sales practice violations related to misrepresentations, unsuitable trading, breach of fiduciary duty, and failure to supervise relating to DPPs. The claim settled for $45,000.

In November 2014 a customer complained that Gianchiglia violated the securities laws by alleging that Gianchiglia engaged in sales practice violations related to misrepresentations and breach of fiduciary duty relating to DPPs. The claim settled for $14,995

According to BrokerCheck, Gianchiglia operates through several d/b/a entities including Financial Resource Partners, Edia-Eastern Dental Insurance Agency, and PIAM among other business related disclosures.

Advisor Bryan Benson Has Customer Complaint Over Alternative Investments

June 29, 2020 | by Staff Attorney

Advisor Bryan Benson (Benson), formerly employed by Wells Fargo Clearing Services, LLC (Wells Fargo) has been subject to at least one customer complaint and one regulatory action during the course of his career. According to a BrokerCheck report the customer complaint concerns 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 2020 FINRA barred Benson after he consented to sanctions and findings that he refused to provide information and documents that were requested by FINRA in connection with an investigation into an investment-related customer complaint. It is unclear the nature of the FINRA complaint that led to Benson’s bar from the industry

In April 2017 a customer complained that Benson violated the securities laws by alleging that Benson engaged in sales practice violations related to unsuitable investments concerning DPPs and limited partnership interests. The claim settled for $415,000.

Gary Barth Has Complaint Over Alternative Investment Sales Practices

June 29, 2020 | by Staff Attorney

Advisor Gary Barth (Barth), currently employed by Ameritas Investment Company, LLC (Ameritas) has been subject to at least four customer complaints during the course of his career. According to a BrokerCheck report one customer complaint concerns 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 November 2019 a customer complained that Barth violated the securities laws by alleging that Robare engaged in sales practice violations related to an misrepresentation in the sale of REITs. The claim alleges $600,000 and is currently pending.

According to BrokerCheck, Barth operates through several d/b/a entities including Barth Financial Wealth Management Group and Barth Financial. Barth also engages in other businesses including Kaufmann Building LLC, BAB Properties LLC, and Kearney Hub among other business related disclosures.

Advisor David Weisberg Suspended Over Excessive Trading Charges

June 25, 2020 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker David Weisberg (Weisberg), formerly associated with Worden Capital Management LLC (Worden Capital), has been subject to at least four customer complaints and one regulatory action during his career. Several of those complaints against Weisberg concern allegations of unauthorized trading activity and the regulatory action includes allegations of excessive trading also referred to as churning among other securities laws violations.

In April 2020 FINRA filed a regulatory action finding that Weisberg consented to sanctions and findings that he engaged in excessive and unsuitable trading in the account of an elderly customer. FINRA found that Weisberg began soliciting stock trades and some of Weisberg’s recommendations involved in-and-out trading and many of them used margin. FINRA determined that the customer relied on Weisberg’s advice and in virtually every case the customer purchased or sold exactly the quantity of shares that Weisberg suggested. FINRA found that the costs of Weisberg’s trading in the customer’s account were significant and Weisberg did not track the trading costs or take them into consideration when making recommendations. FINRA found that the trading generated commissions of approximately $75,638 while the customer lost approximately $55,627. Finally, FINRA also found that Weisberg used discretion to initiate stock trades in customers’ accounts without written authorization and his member firm who never accepted the accounts for discretionary trading.

In July 2019 a customer complained that Weisberg violated the securities laws by alleging that Weisberg engaged in sales practice violations related to negligence, unsuitability, breach of fiduciary duty, breach of contract, negligent misrepresentation and omissions. The claim is alleges $21,579 and is currently pending.

Mark Robare Has Complaint Over Alternative Investment Sales Practices

June 24, 2020 | by Staff Attorney

Advisor Mark Robare (Robare), currently employed by Triad Advisors LLC (Triad Advisors) has been subject to at least one customer complaint and one regulatory matter during the course of his career. According to a BrokerCheck report one customer complaint concerns 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 March 2020 a customer complained that Robare violated the securities laws by alleging that Robare engaged in sales practice violations related to an unsuitable investment strategy beginning in 2014. The claim alleges $500,000 and is currently pending.

In September 2014 the SEC alleged that Robare used Fidelity Investments for clearing services for its advisory clients whereby Robare entered into a revenue sharing arrangement with Fidelity Investments in 2004. In this arrangement, Fidelity paid Robare to invest in certain mutual funds offered on Fidelity’s platform and Robare received nearly $400,000 from Fidelity from 2005 to 2013 as a result of the arrangement. The SEC claimed that Robare modified its Form ADV disclosures in December 2011 after Fidelity advised Robare that it would cease making payments if the arrangements were not disclosed. The SEC fined Robare $50,000.

Carey Watermark Investors 2 Suffer Losses – Investment Attorneys

June 24, 2020 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating recommendations by brokerage firms for their clients to invest in Carey Watermark Investors 2 aka Watermark Lodging Trust – a non-traded real estate investment trust (non-traded REIT). Carey Watermark Investors 2 originally sold shares for $10.00. The fund claims to have an estimated net asset value per share of $11.41. However, secondary market trading sources cite a far smaller value at only $5.50 a share – implying that the trading markets anticipate that Carey Watermark Investors 2 has substantially dropped in value.

As a background, Watermark Lodging Trust claims to be a premier lodging REIT with a portfolio of high-quality lodging assets led by an internal management team with a distinctive record of stockholder value creation. WLT claims to have been formed to take advantage of current and future opportunities in the lodging industry and seeks to provide investors with attractive, risk-adjusted returns and long-term growth in value.

Thereafter, on April 13, 2020, Carey Watermark Investors 2 and Carey Watermark Investors 1 merged in an all-stock transaction to create Watermark Lodging Trust. In addition, since March 2020 the REIT has suspended distributions due to the reduced travel demand and related financial impact resulting from COVID-19.

In May 2020 the company filed a notice with the SEC stating that “approximately $277 million of indebtedness is scheduled to mature after the date of this Form 8-K through December 31, 2020. This indebtedness is nonrecourse mortgage indebtedness and the Company has extension options with respect to a portion of such indebtedness. If the Company’s lenders do not provide covenant relief or if the Company is unable to repay, refinance or extend any such indebtedness, the lenders may declare events of default and seek to foreclose on the underlying hotels. We may also seek to give properties back to the lenders. We have begun active efforts to raise capital through a variety of strategies, including, without limitation, sales of assets, potentially at discounted prices; incurrences of debt; joint venture arrangements; and/or issuances of equity securities in transactions which may be dilutive to our stockholders.”

Advisor Robert Radli Jr. Alleged to Have Recommended Unsuitable Energy Securities

June 23, 2020 | by Staff Attorney

According to BrokerCheck records financial advisor Robert Radli Jr. (Radli), currently employed by Raymond James & Associates, Inc. (Raymond James), has been subject to at two customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA) Radli has been accused by customers of unsuitable investment advice concerning various investment products including energy stocks most likely including master limited partnerships (MLPs). The law offices of Gana Weinstein 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.

In March 2020 a customer filed a complaint alleging that Radli violated the securities laws including by engaging in unsuitable investments which resulted in losses from a sector concentration from June 2011 through February 2020 and causing $800,000 in damages. The claim is currently pending.

In January 2020 a customer filed a complaint alleging that Radli violated the securities laws including by engaging in unsuitable investments from June 2011 concerning oil & gas investments causing $600,000 in damages. The claim is was denied by the firm.

Our firm handles claims and is also investigating securities claims against brokerage firms over sales practices related to the recommendations of oil & gas and commodities products such as exchange traded notes (ETNs), structured notes, private placements, master limited partnerships (MLPs), leveraged ETFs, mutual funds, and individual stocks.

Hilltop Securities Financial Advisor Dennis Ayre Has Multiple Customer Complaints

June 23, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Dennis Ayre (Ayre), currently employed by Hilltop Securities Inc. (Hilltop Securities) 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), Ayre’s customer complaints alleges that Ayre recommended unsuitable investments in various investments including allegations of concentrations in energy securities and corporate debt among other allegations of misconduct relating to the handling of their accounts.

In April 2020 a customer complained that Ayre violated the securities laws by alleging that Ayre, took excessive risk in the account in relation to the client’s stated objectives. The claim alleges $52,058 in damages and settled for $20,823.06.

In March 2020 a customer complained that Ayre violated the securities laws by alleging that Ayre, engaged in unsuitable excessive concentration and risk. The claim alleges $6,115,287 in damages and is currently pending.

In March 2020 a customer complained that Ayre violated the securities laws by alleging that Ayre, engaged in unsuitable excessive risk and strategy deviation. The claim alleges $1,472,671 in damages and is currently pending.

Rick Davidson Has Investor Complaint Over Corporate Debt and Structured Products

June 22, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Rick Davidson (Davidson), currently employed by National Securities Corporation (National Securities) has been subject to at least six customer complaints, one employment termination for cause, and one bankruptcy during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Davidson’s customer complaints alleges that Davidson recommended unsuitable investments in various investments such structured products and corporate debt among other allegations of misconduct relating to the handling of their accounts.

In May 2016 Davidson was terminated by Morgan Stanley on allegations relating to registered representative’s exercise of discretion in clients’ accounts as well as receipt of a loan from a Morgan Stanley employee.

Thereafter, in May 2019 Davidson declared bankruptcy.

The law offices of Gana Weinstein LLP are currently representing investors who were surprised to find out that the “bonds” that were recommended by their advisors have almost completely stopped paying interest while plummeting in value. What many investors in this situation did not realize was that they were not sold bonds at all but instead complex structured products that go by a variety of names including steepener notes, adjustable rate market notes, spread linked notes, or structured notes. Regulators have already stated that it is imporoper to sell these investments as a fixed income substitute or to compare them to bonds in terms of producing a revenue stream. However, in our firm’s experience it appears that many brokers have been selling structured products as bond alternatives.