Articles Posted in Investor Fraud

shutterstock_179465345-300x200Advisor Chad Barancyk (Barancyk), formerly employed by brokerage firms First Allied Securities, Inc. (First Allied) and Great Point Capital, LLC (Great Point) has been subject to at least 14 disclosures including 11 customer complaints, two regulatory actions, and an employment termination for cause.  According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements.  The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products and have recovered in excess of $50 million in investor losses.  Our firm also represented investors of Barancyk to try to recover their losses.

In their complaint, the clients allege that they trusted Barancyk, doing business as Naples Private Wealth (NPW) to invest funds for their retirement in a prudent and suitable manner.  Instead, it was alleged that Barancyk misled Claimants and other investors by recommending unsuitable investment strategies in various illiquid alternative investments from approximately 2009 onward.  In total, the clients allege they invested approximately $2 million with Barancyk in alternative investments resulting in over $500,000 in losses not including well-managed damages.

It was also alleged that Barancyk failed, as well as First Allied, to disclose multiple criminal related incidents on Mr. Barancyk’s Form U4.  It was alleged that on October 2018 Barancyk was arrested and charged with battery.   This arrest does not appear on Barancyk’s Form U4.  On January 14, 2021 it was alleged that Barancyk was charged with a DUI where his blood alcohol level was .15 or higher or with a person under the age of 18 in the vehicle as well as knowingly driving while his license was suspended.  It was alleged that First Allied terminated Barancyk one day later on January 15, 2021 but did not file a Form U5 noting the DUI.

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shutterstock_132704474-300x200According to records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor Mark Kemp (Kemp) has at least 14 disclosable events.  These events include 11 customer complaints alleging that Rivero engaged in some form of investment related misconduct in the handling of the client’s accounts.  In addition, Kemp has been terminated for cause by two firms and has had a regulatory matter.  Kemp is currently employed by McNally Financial Services Corporation (McNally Financial).  Kemp’s customer complaints alleges that Kemp recommended unsuitable investments in different investment products including reverse convertibles and direct participation programs among other allegations and complaints.

In April 2022 a customer complained that Kemp violated the securities laws by alleging that Kemp made unsuitable investment recommendations specific to reverse convertible securities. The investor alleged damages of $157,600 and the claim is currently pending.

In July 2021 a customer complained that Kemp violated the securities laws by alleging that Kemp violated equitable principles of trade and fair dealing, violation of Securities Act of 1933, violation of Securities Exchange Act of 1934, violation of Texas Securities Act, fraud, negligent misrepresentation, breach of fiduciary duty, and other claims.  The claim is currently pending and the investor seeks $370,006.75 in damages.

In May 2021 a customer complained that Kemp violated the securities laws by alleging that Kemp engaged in fraud, negligent misrepresentation, breach of fiduciary duty, and other claims.  The claim is currently pending and the investor seeks $100,00 in damages.

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shutterstock_186471755-300x200According to records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor Timothy O’Brien (O’Brien), formerly employed by Feltl & Company has been subject to numerous disclosures including at least six customer complaints, two criminal matters, four judgement or tax liens, and regulatory complaints during the course of his career.  O’Brien customer complaints alleges that O’Brien recommended unsuitable investments, made misrepresentations, and overconcentrated investments relating to the handling of client accounts.

In November 2020 O’Brien consented to FINRA findings and sanctions that he placed unauthorized trades in a customer’s account. FINRA found that O’Brien sold a limited partnership position in the customer’s account and purchased Class A shares of a mutual fund. FINRA found that O’Brien then attempted to call the customer to discuss the trades but did not reach her before executing the transactions.

In July 2020 a customer complained that O’Brien violated the securities laws by alleging that O’Brien made unsuitable investments, over concentration, and misrepresentation resulting in excessive losses in the account.  The claim alleged $450,000 in damages and settled for $350,000.

O’Brien has several large tax liens.  Such disclosures 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. Continue Reading

shutterstock_146470052-300x205The attorneys at Gana Weinstein LLP have been receiving investor complaints concerning advisors recommending what the advisors call hedge or bear market products to the investors causing large investor losses.  These complaints often involve large holdings in derivative, leveraged, or inverse investment vehicles that are extraordinarily risky.  Further, such investments are not bear market investments or account protection investments.  These investments are usually leveraged bets against general market indices that have long time history of growth.

Two favorite advisor bets against the general market are leveraged ETFs and VIX related investments.  An ETF is a registered investment trust whose shares represent an interest in a portfolio of securities that track an underlying benchmark or index.  Leveraged ETFs differ from other ETFs in that they seek to return a multiple of the performance of the underlying index or benchmark or the inverse or opposite performance.

To accomplish their objectives non-traditional and leveraged ETFs typically contain very complex investment products, including interest rate swap agreements, futures contracts, and other derivative instruments.  Moreover, leveraged or non-traditional ETFs are designed to achieve their stated objectives only over the course of one trading session, i.e., in one day. This is because between trading sessions the fund manager for the ETF generally will rebalance the fund’s holdings in order to meet the fund’s objectives and is known as the “daily reset.”  As a result of the daily reset the correlation between the performance of a leveraged ETF and its linked index or benchmark is inexact and “tracking error” occurs.  Over longer periods of time or pronounced during periods of volatility, this “tracking error” between a non-traditional ETF and its benchmark becomes compounded significantly.

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shutterstock_186211292-300x200Advisor Kevin Rainwater (Rainwater), currently employed by Arkadios Capital (Arkadios) and ACG Wealth Inc. (ACG Wealth) has been subject to at least four customer complaints and five tax liens or judgments during the course of his career.  According to a BrokerCheck report these customer complaints appears to concern unsuitable investments in alternative investments.  These allegations may also concern investments in GPB Capital Holdings (GPB Capital) related investments.  Arkadios is known to have approved their brokers to sell GPB Capital to their clients.

On February 4, 2021 the U.S. Securities and Exchange Commission (SEC), the U.S. Attorney’s Office for the Eastern District of New York (DOJ), and seven states filed separate simultaneous actions against GPB Capital and other defendants connected to the firm accusing it of being a Ponzi-like scheme.  In a press release the SEC stated that it “charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion…”

As reported by Bloomberg “If proved, [GPB] would be one of the largest such schemes to target individual investors since the massive frauds of Bernard Madoff and Robert Allen Stanford came to light.”  The DOJ indicted David Gentile, the founder of GPB, Jeffry Schneider, the owner and CEO of Ascendant Capital LLC, and Jeffrey Lash, a former managing partner of GPB relating to the fraud.  If convicted, the defendants each face up to 20 years’ imprisonment.[1]

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shutterstock_173509961-300x200Investment Advisor, Brooklynn Chandler Willy, currently registered at Queen B. Advisors, LLC. is currently facing a one-year suspension of her investment advisor license in connection with the sale of unsuitable and unregistered alternative investments.

According to a news source, between 2013 and 2019, Willy’s practice sold approximately $43.5 million worth of unsuitable and unregistered alternative investments to clients. As a result of these transactions, Willy was sanctioned by the Texas State Securities Board

On October 16, 2020, the Texas State Securities Board issued a disciplinary order stating “Respondent Willy’s registration with the Securities Commissioner is suspended for one (1) year and Respondents are ordered to comply with the terms of an undertaking wherein Respondents undertake and agree to pay back $2,750,500 to all clients to whom Respondent Willy sold the alternative investments, and to certain limitations on their registrations.”

Moreover, an SEC IADP report states that in October 2019, Willy was discharged from her previous investment advisor position at , J. W. Cole Advisors, Inc., for violating the firm’s policies regarding participation in unapproved private securities transactions. Additionally, the report discloses a tax lien against Willy from July 2018, of approximately $50,000.

Large tax liens 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.  The SEC 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_175000886-300x225Advisor William Morrow (Morrow), currently employed by Concorde Investment Services, LLC (Concorde Investment) and formerly employed by Independent Financial Group, LLC (Independent Financial) has been subject to at least 14 customer complaints and one employment termination for cause during the course of his career.  According to a BrokerCheck report the customer complaints concerns alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, tenant-in-common programs, and private placements.  Morrow runs his securities business through a d/b/a called Financial Designs, LTD.  The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In May 2020 a customer complained that Morrow violated the securities laws by alleging that Morrow engaged in sales practice violations related to engaging in investments were high risk and not in line with their stated objectives and risk tolerance.  The claim alleges $100,000 in damages and is currently pending.

In February 2015 a customer complained that Morrow violated the securities laws by alleging that Morrow engaged in sales practice violations related to engaging in unsuitable investments, common law fraud, and other violations in the sale of a tenant in common investment purchased in 2006.  The claim alleged $730,000 damages and settled for $100,000.

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shutterstock_71240-300x183The law offices of Gana Weinstein LLP are currently investigating claims that advisor Paris Lewis (Lewis) has been accused by his former employer of borrowing funds from a client among other allegations.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Lewis has been terminated by his two prior employers concerning his outside business activities.  According to BrokerCheck records, Lewis was formerly registered with FINRA member firm NYLife Securities LLC (NYLife Securities) and MetLife Securities Inc. (MetLife).  If you have been a victim of Lewis alleged misconduct our firm may be able to assist you in recovering funds.

In December 2019 NYLife Securities terminated Mr. Lewis after alleging that he was terminated after he violated company policy by borrowing money from a customer. The company became aware of this matter when the company received a verbal customer complaint.

In February 2015 Metlife terminated Mr. Lewis after alleging that he did not follow firm policy regarding outside business activities.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs.  The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws.  In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm.  Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

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shutterstock_161005310-300x168The law offices of Gana Weinstein LLP are currently investigating claims that advisor Benjamin Lowder (Lowder) has multiple client complaints concerning allegations that he engaged in the sales of private securities among other allegations.  Lowder was also barred by The Financial Industry Regulatory Authority (FINRA) concerning his private securities sales conduct.  According to BrokerCheck records, Lowder was formerly registered with FINRA member firm MSI Financial Services, Inc. (MSI Financial).  If you have been a victim of Lowder’s alleged misconduct our firm may be able to assist you in recovering funds.

In October 2019 FINRA found that Lowder consented to the sanctions and a bar from them industry as well as to the entry of findings that he refused to appear for testimony before FINRA during the course of an investigation that began after investor civil lawsuits submitted by his former member firm. FINRA found that the civil lawsuits alleged unfair and deceptive trade practices and state securities fraud regarding investments in fictitious entities.

According to Lowder’s publicly disclosed records the he has no disclosed outside business activities.

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shutterstock_183525503-300x200Advisor Mercer Hicks (Hicks), currently employed by Southeast Investments, N.C., Inc. (Southeast Investments) has been subject to at least five liens, three employment terminations for cause, and one regulatory complaint during the course of his career.  According to a BrokerCheck report the customer complaints concern 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 represented dozens of investors who suffered losses caused by these types of high risk, low reward products.

In December 2019 Hicks was named a respondent in a FINRA complaint alleging that he recommended unsuitable investments to five senior customers to purchase speculative REITs and non-traded business development companies (BDCs). FINRA alleges that the prospectuses and subscription agreements for these non-traded REITs and non-traded BDCs stated that investing in these securities involved a high degree of risk, was speculative, was not suitable for persons who require immediate liquidity, guaranteed income, or seek short-term investments, and was only appropriate for those investors who could afford a complete loss of their investments.

FINRA claims that the five senior customers at issue were not seeking to make speculative, high-risk investments.  The customers’ account documents indicated that they were seeking to preserve their capital or capital appreciation. In addition, FINRA claims that some of these customers have encountered difficulties liquidating the investments to obtain funds that they needed to pay for medical care.  FINRA alleged that Hicks recommended purchases of unsuitable non-traded REITs and non-traded BDCs to the five senior customers totaling approximately $665,000 while Hicks received a seven percent commission from each sale totaling $46,550.

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