Articles Posted in Fiduciary Duties

shutterstock_99315272-300x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former Newbridge Securities Corporation (Newbridge Securities) broker Edward Klug (Klug) left the securities industry in May 2018 after disclosing several large tax liens in the prior years.  Klug has made seven financial related disclosures and lists four customer complaints.  The customer complaints against Klug allege churning or excessive trading.

In March 2018 Klug disclosed a $141,711 tax lien against him.  In May 2017, Klug disclosed a $482,714 tax lien against him.  Prior to that, in April 2016 Klug disclosed a $44,229 tax lien against him.  Such disclosures on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services.  FINRA discloses information concerning a broker’s financial condition because a broker’s inability to handle their own personal finances has also been found to be material information in helping investors determine if they should allow the broker to handle their finances.

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shutterstock_61848763-300x203The securities attorneys at Gana Weinstein LLP are currently investigating former International Assets Advisory, LLC (International Assets) broker Frank Cuenca.  According to BrokerCheck records, in December 2017, Cuenca was terminated by SII Investments, Inc. (SII investments) for failing to follow his firm’s procedures regarding submitting variable annuity transactions. He also failed to submit a customer complaint and unapproved email in a timely manner. In addition, Cuenca has been subject to five customer disputes, the majority alleging failure to follow customer instructions.

In March 2009, a customer alleged that in 2008, Cuenca failed to follow customer instructions to liquidate the account and to move $12,000 back into the market. The customer requested $12,000 in damages.

In December 2008, a customer alleged that Cuenca liquidated the customer account without the customer knowledge or permission. The customer requested $5,000 in damages. Continue Reading

shutterstock_156764942-200x300The securities attorneys at Gana Weinstein LLP are investigating claims against UBS Financial Services Inc. (UBS Financial) broker Samuel Rankin (Rankin). According to BrokerCheck records, Rankin has been subject to eight customer complaints, two of which are still pending. The majority of these complaints concern the misallocation of customers’ funds into unsuitable investments.

Most recently, in September 2017, a customer alleged that from 2015 to 2016, Rankin misallocated funds into highly risky investments which were unsuitable to the customer’s needs.  The customer is requesting $849,221 for damages. This dispute is still pending.

In August 2017, a customer alleged that from 2009 to 2017, Rankin misallocated retirement funds into aggressive investments that were unsuitable to the customers’ needs and violated their written agreement to placement in only moderate-risk investments. This dispute is still pending. Continue Reading

shutterstock_66745735-300x200The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Sandeep Varma (Varma).  According to BrokerCheck records, Varma has been subject to two regulatory matters in which FINRA sanctioned Varma for various violations of the securities laws. In addition, Varma has been subject to five customer complaints. The majority of these complaints involve the recommendation of unsuitable and misrepresented variable investments including CRTs and life insurance policies.

In January 2018, FINRA found that Varma misrepresented a real-estate planning strategy involving Charitable Remainder Trusts (CRTs) to 70 potential customers by providing misleading claims about the nature of deferred capital gains taxes, risks, and rewards that are involved in CRTs. In addition, Varma recommended that the sale of appreciated assets should be invested into variable annuities and into premiums for an insurance policy. While recommending these investments, Varma failed to disclose that the premium payments for the life insurance policy were dependent on performance of investments in the CRT and that this yielded risk for lapse in the insurance policy. FINRA found that Varma’s positive projection of the performance of investments in the CRT and life insurance policy was exaggerated in a promissory manner because it didn’t disclose the reasonable possibility of negative investment performance. In February 2018, Varma was suspended for 10 days and fined $15,000. Without admitting or denying the findings, Varma consented to the sanctions and to the entry of findings.

Varma has also been subject to numerous customer complaints over the course of his career.  The most recent case was filed in August 2017 and alleged that in 2000, Varma recommended an unsuitable life insurance policy investment to customers. The claim was settled at $350,000.

In January 2016 another customer filed a complaint alleging that from 2002 to 2014, Varma recommended an unsuitable insurance life policy to customers. The claim was settled for $850,000. Continue Reading

shutterstock_12144202-300x200According to BrokerCheck records financial advisor Herbert Voss (Voss), formerly associated with Stockcross Financial Services, Inc. (Stockcross Financial), has been subject to eight customer complaints, one FINRA action, and one employment termination.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Voss was barred from the financial industry in May 2018 when Voss consented to the sanction and to the entry of findings that he refused to appear for FINRA testimony concerning a customer complaint alleging that Voss had engaged in unauthorized trading in the customer’s account.  The refusal to cooperate draws an automatic bar from the industry.

In December 2017, a customer filed a complaint alleging that Voss’ investments caused poor performance and $550,000 in damages.  The claim is currently pending.  Prior to that, in February 2017 a client accused Voss of causing $900,000 in damages due to unsuitable investments.

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shutterstock_128655458-300x200The securities attorneys at Gana Weinstein LLP are currently investigating Peachcap Securities, Inc. (Peachcap Securities) broker Aaron Brodt (Brodt). According to BrokerCheck Records kept by The Financial Industry Regulatory Authority (FINRA), Brodt has been subject to four customer complaints alleging breach of fiduciary duty and unsuitable investment recommendations. One of these disputes is currently still pending. In addition, Brodt has also been subject to one financial action.

Most recently, in May 2017, a customer alleges that from 2014 to 2015, Brodt breached his fiduciary duty and was grossly negligent in his recommendation of 4 investments that he placed the customer in.

In April 2016, a customer alleged that from May 2015 to October 2015, Brodt recommended unsuitable investments to the customer. The case was settled at $116,667.

In April 2016, a customer alleged that in May 2015, Brodt provided unsuitable investment recommendations. The dispute was settled at $58,333. Continue Reading

shutterstock_151894877-300x200According to BrokerCheck records financial advisor Zachary Feinsilver (Feinsilver), employed by FMSBonds, Inc. (FMSBonds), has been subject to three customer complaints.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Feinsilver has been accused by a customers of unsuitable investment advice concerning recommendations to invest in Puerto Rico bonds.   Puerto Rico has been devastated by a $70 billion debt it cannot pay in addition to extensive hurricane damage.  However, according to news reports, the process to resolve Puerto Rico’s debts could take years.  In fact, it has taken more than two years of debate with Puerto Rico’s government, creditors, and federal lawmakers just to get to this point.

In February 2018 a client complained that certain aspects of bonds were misrepresented by Feinsilver.  The complaint was closed.

In December 2017 another customer complained that Feinsilver made unsuitable investments in Puerto Rico bonds claiming $100,000 in damages.  The claim was settled for $50,000.

According to some source Puerto Rico bond investors recovery ranges could be as low as 10 to 20 cents on the dollar when the island emerges.  Why so little?  How much can $70 to $100 billion be worth when there are only 1.4 million workers in Puerto Rico and a 45% poverty rate?  In fact, workers are leaving the island in record numbers that will soon be made worse by Hurricane Maria.  84,000 people moved from Puerto Rico to the United States in 2014 resulting in 1.8% of the whole island leaving.

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shutterstock_189302954-300x203The securities attorneys at Gana Weinstein LLP are currently investigating Garden State Securities, Inc. (Garden State) broker Jason Zwibel (Zwibel). According to BrokerCheck records, Zwibel has been subject to 4 customer complaints, one of which is still pending.

In November 2017, a customer alleged that Zwibel engaged in unsuitable investments and breach of fiduciary duty from 2013 to 2016. The customer is requesting $2,670,750 in damages. This complaint is still pending.

In June 2007, a customer alleged that Zwiber engaged in breach of fiduciary duty, misrepresentation of investments, and failure to supervise. The case settled at $50,000.

In addition, in 1994, Zwibel was discharged from D.H. Blair & CO. Inc. for taking another account executive’s property, specifically 15 leads from another executive. Continue Reading

shutterstock_184429547-300x200The securities attorneys at Gana Weinstein LLP are investigating claims against J.W. Cole Financial, Inc. (J.W. Cole Financial) broker Justin Vaccaro (Vaccaro). According to BrokerCheck records, Vaccaro has been subject to three customer complaints, one of which is still pending.

In September 2017, a customer alleged that Vaccaro engaged in Breach of Fiduciary duty, unsuitable investments, fraudulent misrepresentations, and failure to supervise. The case settled at $70,000.

In September 2017, a customer alleged that Vaccaro had advised for unsuitable investments, violated the Oregon Securities Law, breached fiduciary duty, and committed fraud and deceit. The client has requested $195,000 in damages. This dispute is still pending.

In addition, Vaccaro’s previous employer, Raymond James Financial Services, Inc. discharged Vaccaro in April 2017 for Vaccaro’s failure to disclose a power of attorney relationship with a non-customer on a firm attestation. Continue Reading

shutterstock_1832893-226x300The investment lawyers of Gana Weinstein LLP are investigating claims against Dennis Rasmusson (Rasmusson). According to BrokerCheck records, Rasmusson has been subject to two customer disputes and regulatory action.

In 2014, a customer alleged that Rasmusson failed to follow instructions, traded excessively and breached his fiduciary duty. The damage amount requested was $500,000 and this dispute settled for $110,000. In 2013, a customer alleged mismanagement of portfolio. This dispute was settled for $34,000.

In 2011 the state of Nebraska sanctioned Rasmusson for failing to keep certain books and records and maintain policies and procedures manual.