Articles Posted in Investment Lawyer

shutterstock_114775264-300x200The securities lawyers of Gana LLP are investigating customer and regulatory complaints filed against broker Jeffrey Hill (Hill). According to BrokerCheck records, Hill has been subject to three regulatory actions, eight customer complaints, and one termination for cause disclosures. The most recent customer complaint against Hill alleged that between 2003 and 2014 the customer’s account was subject to churning, unauthorized trading, unsuitability and breach of fiduciary duty.  The claim alleged damages of $1,600,000 and settled.

On November 22, 2016 Wells Fargo Advisors (Wells Fargo) terminated Hill based on activity alleged to have happened at his prior firm when the broker entered into an AWC with FINRA agreeing to a fifteen month suspension from the industry.

In FINRA’s complaint settled in November 2016, Hill consented to sanctions and findings that he initiated hundreds of trades for two elderly customers without contacting them and recommended or engaged in dozens of transactions that were qualitatively or quantitatively unsuitable or lacked a reasonable basis in corporate and municipal bonds. FINRA also found that neither of those customers explicitly permitted Hill to use discretion in their accounts.  FINRA found that Hill would recommend that one of the customers sell bonds shortly after buying them.  FINRA determined that there was no justification for the trading as neither changes in the bonds’ prices, interest that accrued, changes in the issuers’ condition, nor any other factors appeared to effect the short-term trading.

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shutterstock_85873471-300x200Gana LLP is investigating a customer complaint filed with the Financial Industry Regulatory Authority (FINRA) again broker Joeann Mitchell Walker (Walker). According to FINRA’s BrokerCheck records for Walker, there are several settled disclosures on her record. Walker entered the securities industry in 1992 and currently employed at Next Financial Group, Inc. She was previously employed at LPL Financial LLC (8/2006 – 4/2015), Commonwealth Financial Network (7/1998 – 8/2006), American Express Financial Advisors (6/1992 – 7/1998), and IDS Life Insurance Company (06/1992 – 7/1998).

In March 2016, a customer complaint was filed alleging Walker made unauthorized sales of different stocks, unauthorized and unsuitable purchases of variable annuities, and unauthorized mutual fund switches during the period of June 2014 to June 2015 while Walker was employed at LPL Financial LLC. The stated alleged damages were $208,764.00. The claim was settled in November 2016 for the amount of $175,000.00.

Walker has two additional previous disclosures from 2005 and 1999. In April 2005, a claim was filed alleging that Walker practiced in excessive turnovers in the client’s mutual fund account. The claim alleged damages of $30,000.00. This claim was settled in July 2005 for the final settlement amount of $9,900.00.

shutterstock_26813263-300x199The securities and investment lawyers of Gana LLP are investigating customer complaints filed with the Financial Industry Regulatory Authority (FINRA) against broker James Paul Kolf (Kolf). According to FINRA’s BrokerCheck records for Kolf, there are at least 6 disclosures on Kolf’s record including customer complaints and regulatory actions resulting in being barred from FINRA. The customer complaints against Kolf allege securities law violations that claim fraud, unsuitable investments, and breach of fiduciary duty.

Kolf was barred permanently from FINRA on September 2016. FIRNA ruled that he violated Securities Exchange Act of 1934 and FINRA Rules 2020 and 2010 by selling at least $588,000 worth of misrepresented securities to his clients. The securities resulted in being falsified by Kolf and the clients’ funds were used to fund his personal business expenses. He created false statements for his clients to show their interests in these investments that they were not aware were fake.

The most current customer complaint pending against Kolf was from November 2016, alleging Kolf used client funds for personal expenses. This claim occurring during Kolf’s employment at MSI Financial Services, Inc. The customer alleged losses of $29,000.00. A second customer complaint was submitted in December 2016 regarding Kolf’s actions while employed at MSI Financial Services, Inc. The customer alleged that Kolf made inappropriate recommendations to purchase a variable life insurance policy and alleged damages of $54,701.00. This complaint is still pending. The third customer complaint was lodged in December 2016 alleging that Kolf misrepresented the benefits of transferring money from one firm into variable annuities. This allegation occurred in February 2014 when Kolf was with MSI Financial Services, Inc. and is still pending.

shutterstock_112866430-300x199The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against current Questar Capital Corporation (Questar) broker Stephen Swarbrick (Swarbrick). According to BrokerCheck records, Swarbrick has spent 23 years in the securities industry and is currently located in Roseville, California operating under the d/b/a Weston and Tuttle Wealth Advisors, LLC.  Over his career, Swarbrick has been the subject of at least three customer complaints.

The most recent complaint was filed in January 2017 alleging that a complaint was filed with the California Department of Business Oversight alleging unsuitable sales for $400,000 in equipment leasing and oil and gas partnerships from December 2009 through June 2014.  The customer alleged $400,000 in damages.  The claim is currently pending.  Many of Swarbrick’s other customer complaints similarly allege damages resulting from the sale of alternative investment products such as equipment leasing and oil and gas private placements.

Our firm often handles cases involving direct participation products (DPPs) and private placements including oil and gas partnerships, non-traded real estate investment trusts (REITs), and other alternative investments.

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shutterstock_184430498-300x225Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Wendy Feldman (Feldman) currently associated with H. Beck, Inc. (H. Beck) alleging Feldman engaged in a number of securities law violations including that the broker made unsuitable investments and unauthorized trading among other claims.  According to BrokerCheck, Feldman currently has two customer complaints and one employment termination for cause.

In July 2015, a customer brought a complaint against Feldman alleging that between 2011 to 2014 the broker engaged in unauthorized trading, made unsuitable purchases, and failed to disclose fees.  The complaint alleged damages of $5,000,000.  In 2016 an arbitration was held and the customer was awarded $8,606,599 in total.

Shortly after the arbitration award Morgan Stanley terminated Feldman due to allegations involving adherence to industry rules and/or firm policy including with regard to use of trading discretion.

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shutterstock_187532303-300x200Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Adam Estes (Estes).  According to the FINRA action, Estes consented to the sanctions and findings that he participated in private securities transactions totaling over $1.2 million without providing prior written notice his brokerage firm – J.J.B. Hilliard – nor sought the firm’s permission to participate in several businesses.  According to FINRA, Estes also engaged in outside businesses which were formed by him and others without providing prior written notice to the firm.  FINRA also alleged that Estes made misrepresentations and omissions concerning the private securities transactions and outside business activities in firm annual questionnaires and other compliance documents.

The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

Estes entered the securities industry in 2000.  Since February 2000 Estes was registered with J.J.B. Hilliard out of the firm’s Bloomington, Indiana office location.

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shutterstock_38114566Investment attorneys at Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against David Lerner (Lerner) currently associated with Network 1 Financial Securities Inc. (Network 1) alleging unsuitable investments and failure to follow instructions among other claims.  According to brokercheck records Lerner has been subject to 10 customer complaints, one regulatory sanction, one employment separation for cause, and three judgments/liens.

In July 2015, Lerner received a tax lien in the amount of $16,388.  Earlier in April 2015 Lerner was subject to another tax lien of $81,986.  A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly.  This obligation includes making only suitable investments for their client.  The suitable analysis has certain requirements that must be met before the recommendation is made.  First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence.  Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors.  Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives.  These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

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shutterstock_71403175The securities lawyers of Gana LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Charles Obryant (Obryant) alleging unsuitable investments, negligence, breach of fiduciary duty, and unauthorized trading.  According to brokercheck records Obryant has been subject to four customer complaints and one employment separation for cause.

A customer complaint filed in October 2015 alleged negligence and suitability violations causing damages in the amount of $630,000.  The claim was settled for $632,298.

In January 2016, Stifel Nicolaus discharged Obryant alleging a loss of confidence after settlement of complaint.  The broker commented on the discharge stating that the equity concerning the dispute was a Stifel buy recommended security that went bankrupt and the broker made no personal contribution to the settlement.

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shutterstock_62862913The securities lawyers of Gana LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Allegis Investment Services, LLC and its affiliated investment advisory firm Allegis Investment Advisors, LLC (Allegis) concerning unsuitable trading involving options.  According to the brokercheck records of one of the firms representatives, Peter Klaass (Klaass), the firm has been subject to at least six complaints through this advisor since October 2015.  Klaass lists his D/B/A as the Bowen Group.

The customer complaints against Klaass allege securities law violations that including unsuitable investments among other claims.  The most recent claim was filed in June 2016 and alleges that in the role of supervisor, Klaass failed to meet the standard of care and in August 2015 client suffered a loss of $400,000.  The claim is currently pending.  In another arbitration filed in April 2016, the customer alleged that the Advisory firm recommended a trading strategy without regard to the client’s age, investment experience, and risk tolerance.  The customer is seeking $660,300 in damages.  The claim is currently pending.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors.  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_133513469The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker John Tinnelly (Tinnelly).  According to BrokerCheck records Tinnelly has been the subject of at least ten customer complaints and one regulatory action.  The customer complaints against Tinnelly allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, and churning (excessive trading) among other claims.

The most recent complaint was filed in April 2015 and alleged churning, unsuitable investments, unauthorized trading, breach of contract from July 2010 until November 2012 causing $168,924 in damages.  The complaint settled with no contribution by the broker.  In March 2015, another customer complaint alleged churning, unsuitable investments, unauthorized trading, breach of contract from February 2010 until March 2011 causing $118,375 in damages.  The complaint is currently pending.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time.  Often times the account will completely “turnover” every month with different securities.  This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades.  Churning is considered a species of securities fraud.  The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions.  A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements.  Certain commonly used measures and ratios used to determine churning help evaluate a churning claim.  These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

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