Gana LLP’s securities fraud investigation has uncovered a complaint filed by the Financial Industry Regulatory Authority (FINRA) against broker Gerald O’Halloran (O’Halloran). O’Halloran was formerly associated with Kovack Securities Inc. The complaint alleges that O’Halloran has been the subject of at least eight customer complaints, two employment separations for cause, and one criminal charge. The customer complaints against O’Halloran is a makeup of allegations of numerous securities law violations, including that O’Halloran engaged in unauthorized trades, misrepresentation, breach of fiduciary duty & breach of contract among other claims.
The most recent complaint against O’Halloran was filed in August 2016, alleging $135,000.00 in damage stemming from violation of trading negligently, misrepresentation, omission of a material fact, breach of fiduciary duty & breach of contract in customer’s account while employed at Credit Suisse Securities. The claim is currently pending.
In 2011 a customer filed a complaint alleging unauthorized trades in the account during February 2011 claiming $14,000.00 in damages. The case was resolved with the customer receiving $27,000.00.
In addition to the customer complaints against Gerald O’Halloran, there are two previous employment separations “for cause”. In 1998, Edward D. Jones & Company L.P discharged O’Halloran after allegations for failing to comply with record keeping requirements. In 2000, A.G Edwards & Sons, INC. permitted O’Halloran to resign after allegations were made that the broker improperly handled customer communication.
O’Halloran has been in the industry for 31 years. He is currently registered with Kovack Securities, Inc. since 2004 out of the firm’s Punta Gorda, Florida office location. Before aligning with Kovack Securities, Inc., O’Halloran was registered with Financial Investment Analysts, Inc. from August 2002 until May 2004.
Unauthorized trading occurs when a broker sells securities without the prior authority from the investor. This activity is strictly prohibited and is regulated by FINRA. NYSE Rule 408(a) and FINRA Rules 2510(b) requires all brokers to fulfill an inherent obligation by first discussing trades with the investor before execution. These rules explicitly prohibit brokers from making discretionary trades in customers’ non-discretionary accounts. The Securities and Exchange Commission (SEC) has also found that unauthorized trading to be of fraudulent nature since obtaining permission from the investor to initiate a trade and maintaining disclosure of continuous activities are of utmost importance.
It is important to note that disclosures of complaints, discharges, or terminations are not clearly and accurately available for investors’ review. A Wall Street Journal story found that FINRA’s records are not always comprehensive. Its research into 26 different state regulators revealed that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on FINRA’s BrokerCheck records. A more alarming fact revealed that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.
The investment attorneys at Gana LLP represent investors who have suffered securities investment losses due to the mishandling of their accounts by negligent brokers. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover damages after representation.