Articles Posted in Securities Attorney

shutterstock_184149845-300x246The securities lawyers of Gana LLP are following the case against broker Jeffrey Kluge (Kluge) who pleaded guilty to two counts of bank fraud in the state of Minnesota. A plead agreement was filed with the U.S. District Court in Minnesota on March 29, 2017. Kluge entered the securities industry in 1991 and remained with Merrill Lynch, Pierce, Fenner & Smith Inc. for the entirety of his career. Kluge started a scheme to create fraudulent Merrill Lynch account statements to falsely secure collateral for multi-million lines of credit. Kluge was able to carry out this scheme by creating a fake domain name, www.mymerrillonline.com, and fake email address, pledgecontrol@mymerrillonline.com, to send the falsified account statements to Platinum Bank. A false Merrill Lynch identity was used as a cover for the email address. Kluge ran this fraudulent scheme for 15 years, starting in 2001 to November 2016.

In 2001, Kluge received a line of credit for $150,000 from Alliance Bank by putting up municipal bond funds as collateral. These bond funds were substantiated by falsified account statements that hid the fact that the same bonds were already pledged to Merrill Lynch loans previously obtained by Kluge. The outstanding balance of Alliance Bank line of credit was at $6 million in November 2016.

Utilizing the same scheme for Alliance Bank, Kluge was able to secure a $1 million line of credit from Platinum Bank in Minnesota. He procured this line of credit by putting up the same assets used for Merrill Lynch and Alliance Bank.  The Platinum Bank line of credit balance was at $2.7 million as of November 2016.

shutterstock_132704474-300x200The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Swan Sihua Shen (Shen) also known as Swan Sihua Zhang. According to BrokerCheck records there are at least six disclosures on Shen’s record including customer complaints, multiple regulatory actions, and one employment separation from CUNA Brokerage Services.

The most recent regulatory action against Shen was filed by the Maine office of Securities in October 2016 alleging that she failed to disclose history records so as a result was ordered for heightened supervision for 2 years.

In February 2015, the State of Massachusetts filed a claim against Swan Shen alleging that she repeatedly violated firm policies by copying and pasting client signatures, and altering forms which was precipitated by her termination from CBS in August 2013.

shutterstock_183201167-300x198The investment attorneys of Gana LLP are interested in speaking with clients of broker Parks Heard Brown Jr. (Brown). According to his BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA), Brown has been the subject of at least four customer complaints. The customer complaints against Brown allege securities law violations that claim unsuitable investments, churning, unauthorized trading, breach of fiduciary duty, and negligence among other claims.

The most recent complaint was filed in October 2016, alleging that the broker while employed at VSR Financial Services Inc. made unsuitable investments based on the client’s liquidity needs. In March 2014, FINRA found that Brown violated FINRA rules 2090 and 2111 that require the use of reasonable diligence when recommending investment strategies. In addition, a customer alleged an unsuitable series of investments made in account between June 2012 and January 2014 resulting in damages of $245,750.00. The case settled for $71,500.00.

In another case filed in March 2004 a customer alleged that in June 2003 Brown misrepresented and failed to inform the account activity that caused $7,000.00

shutterstock_168737270-300x168Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Dominic DeBruin (DeBruin), formerly associated with LPL Financial, LLC (LPL Financial).  According to brokercheck, FINRA found that DeBruin refused to provide information and documents and to appear for on-the-record testimony as requested by FINRA concerning a member firm’s Form U5 reporting that he was under internal review for depositing client’s funds related to potential private securities transactions undisclosed to the firm into a bank account DeBruin controlled.

At this time it is unclear the total scope and extent of these outside business activities and private transactions.  However, according to DeBruin’s disclosures he is affiliated with the following entities: 1) Capricorn Partners, LLC – DeBruin’s securities d/b/a; 2) Out of Order LLC – an entertainment boking agency; 3) Goodlife Financial Group – an investment d/b/a; 4) Top 5 Entertainment.  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.

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shutterstock_123758422-300x200Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Barry Rumpel (Rumpel) currently associated with IFS Securities alleging unsuitable investments among other claims.  The majority of the complaints involve variable universal life insurance policies (VULs).  According to brokercheck records Rumpel has been subject to four customer complaints, one employment separation for cause, and one criminal matter.

In May 2016 Woodbury Financial Services, Inc. (Woodbury Financial) alleged that Rumpel engaged in a personal financial transaction with a client and terminated Rumpel.  The most recent customer complaint was filed in October 2016 and alleged that a VUL sold to the customer and his wife were not suitable and that wrong net worth was entered in application in 2011 and 2012.  The claim was dismissed.

VULs are often unsuitable life insurance products for many investors due to their high costs compared to traditional life insurance policies.  VULs can also lapse if policy premiums are not paid resulting in a complete loss of the investors capital without any life insurance benefit.

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shutterstock_20354401-300x200Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Bryon Glime (Glime) formerly associated with Capital Investment Group, Inc. (Capital Investment) alleging unsuitable investments and unauthorized trading among other claims.  According to brokercheck records Glime has been subject to three customer complaints, one criminal matter, three judgments or liens, one employment termination for cause, and one regulator action.

In September 2015 Glime was terminated by Capital Investment after the firm alleged that Glime failed to timely report a criminal disclosure to the firm.  The criminal disclosure disclosed includes allegations of theft, embezzlement, and misappropriation.

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shutterstock_70513588-300x200Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Charles Sorensen (Sorensen) currently associated with Allegis Investment Services, LLC (Allegis Investment), d/b/a Soresnsen Financial, Inc., alleging unsuitable investments, unauthorized trading, and misrepresentations among other claims.  Some of the complaints involve securities including mutual funds and options.  According to brokercheck records Sorensen has been subject to four customer complaints.

In August 2016 a customer brought a complaint against Sorensen alleging that Sorensen made transactions without authorization in or around August 2015. The complaint alleges $100,000 in damages.  The complaint is currently pending.

In June 2016 another customer filed a complaint alleging that the options strategy in which the account was invested in August of 2015 was not suitable causing $94,133.36 in damages.  The complaint is currently pending.

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shutterstock_57561913-300x189Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Donnie Ingram (Ingram) currently associated with Centaurus Financial, Inc. (Centaurus) alleging unsuitable investments among other claims.  According to brokercheck records Ingram has been subject to eight customer complaints.  Many of the complaints involve direct participation products (DPPs) such as non-traded real estate investment trusts (REITs) and other alternative investments.

Our firm has experience representing investment fraud victims with these investments against Centaurus as well as other brokerage firms.  See Gana LLP Wins Arbitration Award On Behalf of Client Against Centaurus Financial.  In that case, the Claimant alleged that the broker involved invested over $2,000,000 in exclusively high cost products and 50% of those investments were in alternative investments such as private placements, oil and gas partnerships, and REITs.  The other 50% was invested in variable and equity-indexed annuities.  Award Can Be Found Here.

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shutterstock_156972491Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor Wayde Walker (Walker) currently registered with National Securities Corporation (National Securities), alleging unsuitable investments, fraud, breach of fiduciary duty, churning, and unauthorized trading among other claims.  According to brokercheck records Walker has been subject to seven customer complaints and three tax liens.

In May 2016 Walker disclosed a tax lien of $42,132.72.  In September 2015 Walker disclosed a tax lien of $110,255.57.  Also in May 2015 Walker disclosed another tax lien of $39,257.39.  A broker’s inability to pay debts may also be an indicator that a broker may solicit funds and loans from his clients or otherwise engage in other misconduct to raise funds to satisfy personal obligations.

In December 2015 a customer filed a complaint involving Walker alleging that the broker made unauthorized trades and misrepresented securities among other claims.  The customer alleged $513,218.40 in damages.  The claim is current pending.

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shutterstock_70999552Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor Troy Tremblay (Tremblay) currently registered with Centaurus Financial, Inc. (Centaurus), alleging unsuitable investments, fraud, breach of fiduciary duty, negligence, and unfair business practices among other claims.  According to brokercheck records Lambert has been subject to three customer complaints, two judgement/liens, and one financial disclosure.

In May 2014 Tremblay disclosed a tax lien of $43,280.84.  In February 2014 Tremblay disclosed another tax lien of $59,670.74.  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.

In May 2014 a customer filed a complaint alleging that Tremblay caused the customer $932,810 in damages stemming from a tenant in common (TIC) investment.  The claim was resolved for $315,000.

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