Articles Posted in Investment Attorney

shutterstock_160350752-300x200According to BrokerCheck records financial advisor Farrukh Kazmi (Kazmi), currently employed by Berthel, Fisher & Company Financial Services, Inc. (Berthel Fisher) has been subject to one customer complaint, two terminations for cause, one financial disclosures, and one regulatory complaint.  According to records kept by The Financial Industry Regulatory Authority (FINRA), in August 2018 Kazmi was subject to a regulatory complaint by FINRA alleging a number of securities laws violations.

The FINRA complaint alleged that Kazmi regularly used instant messaging and text messaging to communicate with his member firm’s customers to conduct securities business and ignored Berthel Fisher’s explicit instruction that he discontinue using instant messaging to communicate with his customers. FINRA also claims that Kazmi did not inform his firm that he used text messaging or instant messaging to conduct securities business, nor did he provide copies of these communications to the firm. The complaint further alleges that Kazmi repeatedly made false statements to Berthel Fisher and to FINRA about using instant messaging to conduct securities business.

FINRA is also claiming that Kazmi exercised discretion on hundreds of occasions when placing trades in the accounts of customers, without prior written authorization from the customers or written approval from his firm. FINRA also alleges that Kazmi is falsely denying exercising discretion in customer accounts in statements to both Berthel Fisher and FINRA.

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shutterstock_85873471-300x200According to BrokerCheck records financial advisor David Barber (Barber), formerly employed by Madison Avenue Securities, LLC (Madison Avenue) has been subject to five customer complaints, two regulatory actions, and one employment termination for cause.  According to records kept by The Financial Industry Regulatory Authority (FINRA), most of a Barber customer complaints allege that Barber made unsuitable recommendations in equity securities.

In March 2018, FINRA sanctioned Barber and barred him from the industry.  FINRA alleged that Barber failed to produce information and documents request by FINRA during the course of an ongoing examination to determine whether he engaged in unauthorized trading in the accounts of customers of his member firm, exercised discretion in customer accounts without written authorization, or otherwise acted in violation of FINRA rules.

In addition, in September 2011 Raymond James and Associates, Inc. (Raymond James) discharged Barber claiming that he was alleged to misappropriate funds from a client, engaged in outside business activities and selling away, and that the firm lost confidence in the broker.

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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.