Articles Posted in Investment Attorney

shutterstock_177577832-300x300According to BrokerCheck records financial advisor Joseph Peggs (Peggs), currently employed by Ameriprise Financial Services, Inc. (Ameriprise) has been subject to one employment termination for cause, one regulatory action, and eight customer disputes during his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), the customer complaints against Peggs concerns allegations over several different investment products including equities, options, and variable annuity sales practices.

In June 2019 a customer complained that Peggs violated the securities laws by alleging that Peggs and several other defendants failed to carry out the decedent’s intentions regarding beneficiary designations for two annuities. The decedent’s ex-wife contends that the proceeds of the annuities should have been distributed in such a way that the proceeds could fund continuing payments to her. The alleged damages are unspecified and the claim is currently pending.

In February 2019, a customer complained that Peggs violated the securities laws by alleging that Peggs representative placed them in an unsuitable holding when they rebalanced the portfolio in March of 2015 and that the holding in question then lost significant value.  The alleged damages are $20,000 and the claim settled for $15,000.

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shutterstock_180968000-300x200The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Thomas Marino (Marino), formerly employed by R.M. Stark & Co., Inc. (R.M. Stark) has been subject to at least three customer complaints, one regulatory sanction, one financial disclosure, and two terminations for cause.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Marino’s customer complaints alleges that Marino recommended unsuitable securities recommendations among other allegations of misconduct relating to the handling of their accounts.

In July 2019 Marino consented to the sanction and to the entry of findings that Marino refused to provide documents and information requested by FINRA in connection with its investigation into his possible misuse of funds from a senior customer.  As a result, Marino drew an automatic bar from the industry.

In June 2019 Marino was discharged from R.M. Stark after the firm alleged that he engaged in inappropriate and unsuitable investments for a client’s risk tolerance and objectives.

In April 2019 a customer complained that Marino violated the securities laws by alleging that the financial advisor made inappropriate and unsuitable investments for her risk tolerance.  The claim alleges $300,000 in damages and is currently pending.

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shutterstock_102242143-300x169The law offices of Gana Weinstein LLP are investigating broker Marilyn Zehntner (Zehntner), currently associated with Rhodes Securities, Inc. (Rhodes Securities) out of Fort Worth, Texas.  According to a BrokerCheck report, Zehntner has been subject to at least one customer dispute during her career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), the customer complaint against Zehntner alleges breach of fiduciary duty.

In January 2017 customers filed a complaint alleging that Zehntner and her member firm, Rhodes Securities, violated the securities laws by, among other things, engaging in breach of fiduciary duty, negligence, and breach of contract causing over $2,000,000 in damages.  The claim settled for $810,000.

Brokers are required under the securities laws to treat their clients fairly.  This obligation includes the duties to disclose material risks of the investments they recommend and to present products, particularly complex or confusing products, in a fair and balanced manner that allows the client to evaluate the recommendation.  Another important obligation advisors have is to make only suitable recommendations for investments to the client.  There are many investments that are not appropriate for the majority of investors or for certain investors given their risk tolerance, age, and other factors.  Advisors should not present these investment options to clients.  There are two screens that advisors must employ to determine whether an investment is suitable for a client.  First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors.  The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one.  Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

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shutterstock_187532303-300x200The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Richard Cagle (Cagle), formerly employed by Hilltop Securities Independent Network Inc. (Hilltop Securities) has been subject to at least two customer complaints and one regulatory complaint resulting in a bar from the financial industry.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Cagle’s customer complaints allege that Cagle recommended unsuitable securities recommendations among other allegations of misconduct in the handling of customer accounts.

In July 2019 Cagle consented to the sanction and to the entry of findings that he refused to appear and provide an on-the-record testimony requested by FINRA.  FINRA stated that it commenced an investigation into whether Cagle violated FINRA rules by making unsuitable investment recommendations and mismarking customer order tickets while associated with his former member firm.  Cagle’s failure to respond to the investigation drew an automatic bar from the industry.

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shutterstock_157018310-300x200Advisor Richard Pittman (Pittman), currently employed by Cetera Advisors LLC (Cetera) has been subject to at least three customer complaints during the course of his career.  According to a BrokerCheck report the customer complaints mostly concerns alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In October 2018 a customer complained that Pittman violated the securities laws by alleging that the financial advisor made unsuitable investment starting in 2008 among other allegations associated non-traded REITs and other DPPs causing $300,000 in damages. The claim is currently pending.

In August 2018 a customer complained that Pittman violated the securities laws by alleging that the financial advisor made unsuitable investment starting in 2008 among other allegations associated non-traded REITs and other DPPs causing $736,000 in damages. The claim is currently pending.

DDPs such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments virtually never profit investors.  These products are almost always unsuitable for investors because of their high fee and cost structure.  Brokers sell these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for products that no honest advisor would sell.

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shutterstock_187083428-300x198Advisor Craig Sherrer (Sherrer), currently employed by Janney Montgomery Scott LLC (Janney Montgomery) and formerly with Newbridge Securities Corporation (Newbridge Securities) has been subject to at least one customer complaint during the course of his career.  According to a BrokerCheck report the customer complaint concerns alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In April 2019 a customer complained that Sherrer violated the securities laws by alleging that the financial advisor breached their fiduciary duty, negligence, and breach of contract among other allegations associated non-traded REITs causing $1,500,000 in damages. The claim is currently pending.

Our firm often handles cases involving annuities and direct participation products, Non-Traded REITs, oil and gas offerings, equipement leasing products, and other alternative investments.  These products are almost always unsuitable for investors.  In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments which provides a perverse incentives by brokers to create an artificial market for products that no honest advisor would sell.

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shutterstock_152933045-300x200Advisor Christopher Bice (Bice), currently employed by SagePoint Financial, Inc. (SagePoint Financial) has been subject to at least four customer complaints and one termination for cause during the course of his career.  According to a BrokerCheck report some of the customer complaints concern variable annuities and alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

Bice operates under the d/b/a name Bice Wealth Management.  In addition, Bice has several other disclosed outside business activities including Shelton, Nelson & Associates, rental property sales, and Southeast Retirement Planners.

In November 2018 a customer complained that Bice violated the securities laws by alleging that the financial advisor made unsuitable investments, overconcentration, misrepresentations, and failure to supervise causing $1,000,000 in damages.  The claim is currently pending.

In February 2018 a customer complained that Bice violated the securities laws by alleging that the financial advisor made unsuitable investments, overconcentration, misrepresentations, and failure to supervise causing $750,000 in damages.  The claim is currently pending.

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shutterstock_85873471-300x200According to BrokerCheck records financial advisor Michael Greenfield (Greenfield), currently employed by Newbridge Securities Corporation (Newbridge Securities) has been subject to at least six customer complaints and one bankruptcy cause during the course of his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Greenfield’s customer complaints allege that Greenfield recommended unsuitable securities recommendations in a variety of products including master limited partnerships (MLPs), municipal and corporate bonds, and other securities among other allegations of misconduct in the handling of customer accounts.

In January 2019 a customer filed a complaint alleging that Greenfield violated the securities laws by, among other things, that Greenfield was negligent and breached his fiduciary duty with respect to the purchase of MLPs.  MLPs are speculative oil and gas related investments that are linked to the oil markets.  The alleged damages are $200,000 and the claim is currently pending.

In July 2015 Greenfield declared bankruptcy.  Large tax liens or bankruptcy filings on a broker’s CRD can be a red flag that the broker may be influenced to engage in high commission activity in order to satisfy personal debts.  In addition, a broker’s inability to manage their own finances is relevant in a customer’s decision to use their services.

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shutterstock_62862913-259x300Several large brokerage houses have been offering their clients option-based trading strategies referred to as a Yield Enhancement Strategy (YES).  These firms include UBS Financial Services, Merrill Lynch, Credit Suisse, and Morgan Stanley.   According to marketing materials, the YES strategy seeks to increase returns for investors through the trading of options.  These options trading program employ various options trading strategies including the iron condor.

The yield enhancement strategies present substantial risks for investors that some advisors may not be fully disclosing.  Options are complicated by their very nature and most investors lack the knowledge and experience in options, margin, puts, calls necessary to understand the relative risk reward trade offs associated with yield enhancement strategies.  Despite these risks Wall Street firms continue to push these strategies because they generate fees and commissions for the firm while investors shoulder the risk.

First, the name itself is misleading because yield enhancement strategy sounds as if income is going to be generated.  However, writing options and generating premiums is not income.  Its compensation for the risk of the option being written.  One of the most popular YES strategies, the iron condor, can allow an investor to generate a larger net credit relative to downside risk.

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shutterstock_143094109-300x200According to BrokerCheck records financial advisor Peter Bakalis (Bakalis), currently employed by D.H. Hill Securities, LLLP (DH Hill Securities) has been subject to at least two customer complaints, one employment termination for cause, and one regulatory investigation.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Bakalis’ customer complaints allege that Bakalis failed to disclose a non-traded REIT merger and forged client signatures on paperwork.

In October 2018 Bakalis was terminated by his then employer Sigma Financial Corporation when the firm claimed that it has reason to believe that the representative forged, or instructed/caused others to forge, client signatures on account opening and account transfer paperwork.

Thereafter, in December 2018 the State of Michigan Department of Insurance and Financial Services opened an investigation claiming to have received a complaint on the appropriateness of annuity surrender/transfer for 3 different clients.

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