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shutterstock_94127350-300x205Our firm is investigating claims made by regulators and brokerage firms including LPL Financial LLC (LPL Financial) concerning broker Paul Dorion (Dorion).  Dorion is currently not associated with any brokerage firm due to his bar by The Financial Industry Regulatory Authority’s (FINRA) in October 2016 for failing to response to the regulator’s request for information.

FINRA’s investigation likely revolves around the disclosures concerning Dorion’s termination from LPL Financial in October 2015.  At that time Dorion was terminated for cause alleging that the broker engaged in unauthorized trading, violation of firm’s document signature policy, and concerns regarding concentrated equity positions in client accounts.  Doriaon was also alleged to have failed to respond to inquiries from the firm’s compliance department.  Subsequently, in October 2016 a customer filed a complaint alleging that Dorion had excessively traded her account which contained funds from a home mortgage.  The complaint is currently pending.  Dorion also has several tax liens dating from 2010 through 2015.

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shutterstock_183549914-300x200Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Juan Alejos – a/k/a John Alejos (Alejos), formerly associated with brokerage firms Charles Morgan Securities, Inc. (Charles Morgan) and Spartan Capital Securities, LLC (Spartan Capital).  According to brokercheck, Alejos failed to respond to FINRA request for information resulting in an automatic bar from the financial industry.  The subject matter of FINRA’s investigation likely concerned his termination by Spartan Capital in December 2015 concerning allegations that Alejos engaged in outside business activities and possible private securities transactions without first providing the firm written notice of his activities.  At this time it is unclear what outside businesses or the extent of the private securities transactions.

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”.  Often times brokers who engage in this practice use outside businesses in order to market their own securities and raise capital for various ventures or get themselves through times of personal economic hardship.  In Alejos case the broker had a judgment imposed upon him of over $75,000 in 2011.

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shutterstock_175835072-300x199The investment fraud attorneys with Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Gary Saitowitz (Saitowitz) currently not associated with any broker-dealer.  According to brokercheck records Saitowitz has been subject to three customer complaints, declared bankruptcy in March 2015, was terminated for cause by Transamerica Financial Advisors, Inc. (Transamerica), and sanctioned by FINRA in January 2017.  Saitowitz’s termination for cause and FINRA sanctions involve his conduct concerning direct participation products (DPPs) such as non-traded real estate investment trusts (REITs) and potentially other alternative investments.

In January 2017, Saitowitz consented to FINRA sanctions that he had customers sign blank and incomplete brokerage forms and that some of the pre-signed forms authorized fund movement or loans from customer accounts, while others related to customer financial information, used by the firm to supervise whether transactions solicited by Saitowitz were suitable for customers. FINRA found that the maintaining of pre-signed forms enhanced the risk that customers would be placed in unsuitable investments or subject to unauthorized account activity.  FINRA also found that his brokerage firm imposed limits on the amount of a customer’s liquid assets that could be invested in non-traded REITs but that in order to circumvent the limits Saitowitz maintained records overstating the liquid net worth of certain customers in connection with sales of non-traded REITs.

FINRA also found that Saitowitz used personal email addresses to conduct securities business in contravention of the firm’s policies and procedures. Finally, FINRA also determined that Saitowitz failed to report a judgment and a tax lien and to timely report five tax liens.

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shutterstock_183554579-300x200Our firm is investigating claims made by various regulators and brokerage firms including Axiom Capital Management, Inc. (Axiom) and Financial West Group (FWG) concerning broker Sara Eng (Eng a/k/a Sara Aiping Ng).  Eng is currently associated with brokerage firm Moloney Securities Co., Inc. (Moloney).

The allegations revolve around Eng’s offering of investments to clients.  In October 2015, FWG terminated Eng for cause and allowed Eng to voluntarily resign after allegations were made that   Eng was being placed on heightened supervision for potential violation of firm policy regarding marketing of investments to firm customers.  Thereafter, in September 2016, Axiom terminated Eng for cause for violation of the firm’s policies and procedures regarding email correspondence.  At the same time The Financial Industry Regulatory Authority’s (FINRA) opened its own investigation into Eng concerning Axiom’s disclosures for Eng’s termination.  At this time it is unclear the exact nature and extent of the investigation.

Eng entered the securities industry in 1997.  From November 2002 until March 2014, Eng was associated with Berthel, Fisher & Company Financial Services, Inc.  From February 2014 until November 2015, Eng was associated with FWG.  From October 2015 until September 2016, Eng was registered with Axiom.  Finally, since November 2016 Eng  has been registered with Moloney out of the firm’s Oak Brook, Illinois and Flushing, New York office locations.

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shutterstock_188141822-300x200The securities and investment lawyers of Gana LLP are investigating a customer complaint and an employment separation after allegations filed with the Financial Industry Regulatory Authority (FINRA) again broker Louis Frederick Scherschel (Scherschel). According to FINRA’s BrokerCheck records for Scherschel, there is a disclosure on his record for a customer complaint that resulted in arbitration. In October 2015, a customer complaint alleged that Scherschel made unsuitable sales of leveraged EFTs and failed to follower the customer’s instructions to implement sell stops. The original requested damages amount was $500,000 and the case was settled in September 2016 for $295,000.

In September 2015, Scherschel was discharged from his position at Sigma Financial Corporation for failing to comply with the company’s correspondence policy for leveraged ETFs.

Scherschel entered the securities industry in 2009. He was previously registered with:

shutterstock_187532303-300x200Our firm is investigating claims made by various regulators and brokerage firms including the State of Washington against broker Douglas Donnelly (Donnelly), formerly associated with brokerage firms Wells Fargo Advisors, LLC (Wells Fargo), Northwest Asset Management (Northwest), and Dinosaur Financial Group, L.L.C. (Dinosaur Financial).  The allegations revolve around the offering of investments outside of the brokerage firm –a practice known in the industry as “selling away”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.  According to The Financial Industry Regulatory Authority’s (FINRA) brokercheck records Donnelly has been subject to two customer complaints, two regulatory events, and two terminations for cause.  Donnelly has also disclosed outside business activities including Passing Time Winery and Concert Wealth Management.

One of the regulatory events involves claims by the State of Washington alleging that in June 2010, Donnelly began to invest $200,000 in a private placement. Thereafter, Washington alleged that Donnelly sent information about the private placement to potential investors from his Wells Fargo email account.  It was also alleged that Donnelly held meetings at his Wells Fargo office to introduce his Wells Fargo clients to the company’s personnel and provided disclosure information about the company to potential investors.  Washington found that Donnelly introduced approximately 40 individuals to the private placement who invested approximately $4,000,000. Washington found that Wells Fargo investigated and terminated Donnelly for introducing firm clients to the private placement without written approval.

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shutterstock_85873471-300x200Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Thomas Vilord (Vilord), formerly associated with brokerage firms Summit Brokerage Services, Inc. (Summit Brokerage) and SagePoint Financial, Inc. (SagePoint).  According to brokercheck, FINRA found that Vilord consented to the sanction that he participated in undisclosed private securities transactions involving more than $347,500 in unregistered corporate debenture notes sold to customers of his member firm.  FINRA found that Vilord assisted these customers in making the investments by preparing transaction paperwork and providing the customers with information about the company issuing the notes.  FINRA also stated that Vilord lacked a reasonable basis to recommend the notes because he failed to conduct adequate due diligence on the offering because Vilord’s knowledge of the company was limited to his conversations with the company’s owner, information contained on the company’s website, and Google searches.

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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

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shutterstock_170709014-225x300Customers have filed complaints and The Financial Industry Regulatory Authority (FINRA) recently barred broker John Hudnall (Hudnall) – formerly with U.S. BanCorp Investments, Inc. (U.S. BanCorp). The securities attorneys at Gana LLP are investing the allegations against Hudnall including unsuitable investments among other claims.  According to brokercheck records Hudnall has been subject to six customer complaints and one criminal matter.  Many of the complaints involve direct participation products (DPPs) and variable annuities such as non-traded real estate investment trusts (REITs) and other alternative investments.

In FINRA’s complaint against Hudnall it was alleged that he participated in an undisclosed and unapproved private securities transaction by selling a REIT investment to an elderly customer which he split into two simultaneous transactions of $40,000 and $360,000. FINRA alleged that Hudnall did this to circumvent his firm’s supervisory review of such a large transaction of this kind.  According to FINRA, the $400,000 REIT investment exceeded the firm’s supervisory thresholds and would have triggered additional supervisory review and likely would have been disapproved. FINRA also alleged that Hudnall made a promotional offer in which he promised to pay certain customers who purchased fixed annuities 1% annual interest if they held their fixed annuities for at least a year, when in fact this offer was not part of the fixed annuity product that he was selling.

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shutterstock_175298066-300x225Our securities fraud attorneys are investigating customer complaints and a recent regulatory action filed with The Financial Industry Regulatory Authority (FINRA) against Paul Alexander (Alexander) formerly associated with Raymond James & Associates, Inc. (Raymond James), alleging Alexander engaged in a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, breach of fiduciary duty, and securities fraud among other claims.

In November 2016 FINRA sanctioned Alexander after he consented to the entry of findings that in contravention of his member firm’s policies and procedures, Alexander effected transactions while exercising discretion without prior written authorization in customer accounts and without notifying his brokerage firm to accept the accounts as discretionary.

The most recent customer complaint filed against Alexander was in September 2015 alleging unauthorized trading causing $244,000 in damages.  The claim was settled for $95,000.

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shutterstock_24531604-200x300Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC) against broker Richard Cody (Cody) that involves potentially millions in either stolen client funds or misrepresentations concerning the state of their accounts.  Cody is a formerly associated broker with brokerage firms Westminster Financial Securities, Inc. (Westminster), Concorde Investment Services, LLC (Concorde Investment), and IFS Securities (IFS).  Cody conducted his business through his advisory firm Boston Investment Partners.  According to brokercheck, Cody has been subject to three regulatory events, two investigations, and 15 customer disputes among other disclosures.

The SEC’s complaint lays out an astonishing scheme to defraud investors.  The SEC alleged that Cody would tell retired clients that their accounts were flourishing and making money when in fact they were dwindling to near-zero balances.  The SEC tells the tale of three clients who were lied to by Cody about their rapidly depleting retirement accounts through monthly deductions that were unsustainable.

Further, to make the scheme work Cody fabricated account statements, told clients they were withdrawing investment gains rather than depleting their principal, and sent a doctored document to indicate that a financial firm was holding an annuity on behalf of one client.  Cody’s conduct occurred over a 12 year period in which Cody was registered as a broker with five different independent firms.

In addition, Cody was suspended from the securities industry by FINRA from January 7, 2013 to January 6, 2014 for allegedly sending clients inflated account statements while at Westminster and Concorde.  Despite the suspension Cody continued to manage his accounts and violate the terms of the suspension by turning the accounts over to his wife Jill who was also registered with Westminster Financial and Concorde Investment.

During his suspension, Cody used personal email accounts to communicate with clients about investment strategies that then forward recommendations to Jill to execute trades.  Cody is also alleged to have forged client signatures to move their accounts to IFS.  Jill Cody was later the subject of separate FINRA sanction for her facilitation of Cody’s conduct.

Finally, Cody was fired by IFS Securities, his seventh and last employer, in September of 2016 on allegations of selling away and forgery.

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