Articles Posted in Investment Attorney

shutterstock_94332400-300x225According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Carol Chiarito (Chiarito), formerly associated with Mutual of Omaha Investor Services, Inc. (Mutual Omaha) in Pueblo, Colorado was terminated concerning allegations that Chiarito violated firm policies and procedures related to selling away.

The allegations concerning private securities transactions are often accompanied by claims of engaging in outside business activities.  Private securities transactions is a practice known in the industry as “selling away” – a serious violation of the securities laws.

At this time, the selling away claims against Chiarito are unclear as to the exact nature and extent of the activity.  Chiarito’s outside business disclosures include Chiarito’s Retirement by Design, LLC – her d/b/a business.  In addition, Chiarito discloses CareMatch American, Inc., Kiwanis Club of Pueblo, Chestnut Rental Home, and work as an insurance agent among other activities.

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shutterstock_103665437-300x300According to BrokerCheck records financial advisor Charles Kenahan (Kenahan), currently employed by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) has been subject to four customer complaints.  According to records kept by The Financial Industry Regulatory Authority (FINRA), most of a Kenahan’s customer complaints allege that Kenahan made unsuitable recommendations or engaged in excessive trading – sometimes referred to as churning.

In May 2018 a customer alleged excessive trading and unsuitable investment recommendations from 2012 until 2017. The claim alleged $700,000 in damages and is currently pending.

In March 2018 a customer alleged unsuitable investment recommendations, excessive trading and misrepresentation from February 2012 until December 2017.  The claim is currently pending.

shutterstock_184429547-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor John Krohn (Krohn), formerly associated with Principal Securities, Inc. (Principal Securities) in West Des Moines, Iowa was suspended and sanctioned concerning allegations that Krohn engaged in private securities transactions.

FINRA alleged that between April 2014 and January 2017, Krohn served as an officer or a director of four companies, including one that invested in early-stage and distressed companies.  In addition, between December 2012 and December 2016, Krohn was alleged to have made more than two dozen purchases totaling $7.9 million of ten companies’ securities. FINRA alleged that Krohn did not notify Principal Securities about those transactions, his role in them, and whether he had received or expected to receive compensation. In addition, FINRA alleged that Krohn made some of those purchases through the investing company that he owned jointly with a customer.

Krohn disclosed a number of outside business activities including outside insurance business and tax preparation.  In addition, Krohn also disclosed involvement with Domiknow as a board member, Spotlight Innovation, Inc., as a board member, Tax Saver Plus, and Cash Flow Structure Group.

shutterstock_95416924-300x225The securities attorneys at Gana Weinstein LLP are currently investigating previously registered broker David Manor (Manor). According to BrokerCheck Records kept by the Financial Industry Regulatory Authority (FINRA), Manor has been subject to two customer disputes concerning unsuitable investment recommendations and false representations of investments. One of these disputes is currently still pending. In addition, Manor has been subject to resignation from a previous employer.

Most recently, in April 2018, a customer alleged that in 2017, Manor recommended unsuitable investments to the customer. The customer requested $224,837.25 in damages. This dispute is currently still pending.

In January 2016, a customer alleged that Manor falsely represented investments to the customer by failing to disclose the surrender penalty to the investment. The customer further alleged that the investment was unsuitable to her financial status and needs, being that the funds were her only source of income. The customer requested $30,000 in damages.

shutterstock_128856874-300x200The securities attorneys at Gana Weinstein LLP are currently investigating previously registered broker Edward Mirabella (Mirabella). According to BrokerCheck records kept by the Financial Industry Regulatory Authority (FINRA), Mirabella has been subject to 5 customer disputes, 2 of which are still pending. Mirabella has also been subject to two tax liens. The majority of these disputes involve unsuitable investment recommendations, unauthorized trading, and breach of fiduciary duty.

Most recently, in November 2017, a customer alleged that Mirabella churned the customer account and engaged in unsuitable investment transactions. The customer has requested $879,584 in damages. This dispute is currently still pending.

In January 2014, a customer alleged that Mirabella was executing unauthorized trades in the customer account. The customer has requested $40,000 in damages. This complaint is currently still pending.

shutterstock_63635611-300x200The securities attorneys at Gana Weinstein LLP are currently investigating NEXT Financial Group, Inc. (Next Financial) broker Stephen Dellelo (Dellelo).

According to BrokerCheck records, Dellelo is subject to one pending customer complaint concerning unsuitable placements in illiquid investments.

 

In November 2017, a customer alleged that from 2007 to 2017, Dellelo placed the customer into private and illiquid investments that were unsuitable to the customer and resulted in losses of $900,000. This dispute is currently still pending.

shutterstock_20354398-300x200Current Arete Wealth Management, LLC (Arete Wealth) broker Alvery Bartlett (Bartlett) has been subject to three customer complaints.  According to a BrokerCheck report many of the complaints concern alternative investments, private placements, and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs) and oil and gas programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In March 2018 a customer filed a complaint alleging that the investments purchased between 2003 and 2011 were unsuitable and were misrepresented to him.  The client also alleged that the firm failed to conduct adequate due diligence on the investments and failed to supervise the representative.  The claim is currently pending and alleges damages of $6,637,918.

Our firm often handles cases involving direct participation products, Non-Traded REITs, oil and gas offerings, equipment 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.

shutterstock_175835072-300x199According to BrokerCheck records financial advisor Anthony Ferrara (Ferrara), currently employed by Larson Financial Securities, LLC (Larson Financial), has been subject to four customer complaints.  According to records kept by The Financial Industry Regulatory Authority (FINRA), in July 2017 a customer filed a complaint alleging that Larson Financial made unsuitable recommendations and material omissions in the sale of a variable universal life (VUL) policy that was purchased in 2013.  The customer requested $40,000 in damages and is currently pending.  Many of the complaints concerning Ferrara’s conduct include claims concerning the sales of VULs.

In January 2017 another customer filed a complaint alleging unsuitability of the product, misrepresentation, breach of fiduciary duty, deceptive business practices, general fraud and negligence.  The customer alleged $350,000 in damages and the claim is currently pending.

VUL are complex insurance and investment products that investors must fully understand the risks and benefits of prior to investing.  One feature of a VUL policy is that the owner can allocate a portion of his premium payments to a separate sub-account that can be used to grow in value through investments.  Monthly charges for the life insurance policy, including a cost of insurance charge and administrative fees, are deducted from the policy’s cash value.  The cash value of the policy may increase or decrease based on the performance of the sub-account investments.  In addition, the VUL policy terminates, or lapses, if at any time the net cash surrender value is insufficient to pay the monthly cost deductions.  Upon termination of the policy, the remaining cash value becomes worthless.

shutterstock_188606033-300x200According to BrokerCheck records financial advisor Lewis Robinson (Robinson), currently associated with BB&T Securities, LLC (BB&T), has been subject to 10 customer complaints, one regulatory action, and one employment separation for cause.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Robinson has been accused by customers of unsuitable investment advice among other claims.

In August 2017, FINRA found that Robinson settled a customer’s complaint by issuing three checks in the total amount of $12,203.23 to the customer’s wife without the knowledge of his brokerage firm.  FINRA determined that the customer complained on three separate occasions about the amount of commissions that he charged.

In August 2015, Morgan Stanley terminated Robinson for providing unapproved fee reimbursements to a client.

shutterstock_113872627-300x300The financial advisor rating firm Paladin Research & Registry assembled a list of the top 10 investment scams investors are facing today. If you are involved in any of these potential scams, the investment attorneys at Gana Weinstein LLP may be able to help you.

1. Ponzi Schemes

Ponzi schemes came in first-place for having stolen more money than any other type of scam. A Ponzi scheme is a fraudulent investment scam where the scammer promises a high rate of return with little or no risk to investors. Ponzi schemes generate returns for investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. The Ponzi scheme unravels when no more new investors are willing to invest and older investors demand the return of their money. The nature of Ponzi schemes (or pyramid schemes) requires investors (who believe they have a strong investment) to tell friends, family and associates about the investments. The influx of new investors provides scam operators with the assets needed to meet the withdrawal requests of the early investors.