Articles Posted in Securities Fraud

Gana LLP represented 19 Claimants in a FINRA arbitration against Anthony Diaz. A panel of arbitrators awarded the Claimants over $4 million. The case was picked up by major publications including the Washington Post and InvestmentNews. Adam Gana, managing partner of Gana LLP said his clients “gave their life savings to [Diaz], and he was just a predator who was looking out for his own best interest and not the best interest at my clients.” Gana said he will go after Diaz’s assets and earnings in an attempt to recover the judgment. “We will fight tooth and nail to get these people their money,” he said. “This is not money that our clients can afford to lose.”

Gana LLP is a full service law firm that specialized in Securities Arbitration. The firm tenaciously defends investors and aggressively pursues brokerage firms for misconduct.

shutterstock_188874428-300x200The investment attorneys at Gana LLP are investigating a customer complaint brought against former RBC Capital Broker Martin Olson.  According to BrokerCheck Records kept by the Financial Industry Regulatory Authority (FINRA), Olson was subject to a customer complaint in December 2016.

In December 2016, Olson was named in a customer complaint that asserted breach of fiduciary duty, violation of the Michigan Securities Act and fraud. Olson was found jointly and severally liable and the customer was awarded $250,000 in damages.

The term “securities fraud” covers a range of illegal activities involving the deception of investors or the manipulation of the financial markets. Fraud includes false representations, unauthorized trading, value manipulation, and Ponzi schemes. Investors are protected against fraudulent securities activities by several different civil laws.

First, the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 protect investors against deceptive and manipulative acts in the purchase or sale of securities. This sweeping legislation is the cornerstone of federal securities laws. Rule 10b-5 makes it unlawful to employ a device or scheme to defraud, to make any untrue statement of material fact or omit to state a material fact not misleading, or to engage in any practice that would operate as a fraud.

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shutterstock_89758564-300x200Current Geneos Wealth Management, Inc. (Geneos Wealth) broker Kenneth Ancell (Ancell) has been subject to two 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).  Our firm has experience handling investor losses caused by these products.

In June 2017 customers filed a complaint alleging that in or around 2011, Ancell made unsuitable investment recommendations in REITs and alternative investments causing $744,038 in damages.  The claim is currently pending.

Our firm often handles cases involving direct participation products, private placements, Non-Traded REITs, oil and gas offerings, equipement leasing products, and other alternative investments.  These products are almost always unsuitable for middle class investors.  In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments providing perverse incentives for brokers to sell high risk and low reward investments.

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shutterstock_143685652-300x300The securities attorneys at Gana LLP are investigating potential claims against former Capital Securities Management Inc. broker Teryl Trenchard (Trenchard). According to Trenchard’s BrokerCheck records, he was identified in a Financial Industry Regulatory Authority (FINRA) investigation on March 10, 2017. FINRA is examining alleged fraudulent activities of Trenchard.

Trenchard was terminated by Capital Securities Management on March 10, 2017 based upon the FINRA investigation for fraud.

In a pending customer complaint, it has been alleged that Trenchard engaged in misappropriation, forgery, fraud and unauthorized trading in unsuitable transactions between 2005 and 2017. The alleged damages are $1,800,000.

In another pending complaint, a customer is alleging breach of fiduciary duty, breach of contract, conversion, and unsuitable investment recommendations. The customer is alleging damages of $700,000.

In 2000, a customer alleged that Trenchard made several unauthorized trades in her account. This complaint settled for $28,049.49.

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shutterstock_160304408-300x199The investment lawyers of Gana LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Broker Tommy Mai (Mai).

According to Mai’s Brokercheck records, he has been sanctioned by FINRA because he allegedly “forged or caused to be forged customers’ signatures on various types of customer account documents including his member firm’s new account forms and non-firm insurance applications. In total, 53 customer account forms were forged, altered, or otherwise improperly signed (i.e., signed when partially completed or blank). The findings also stated that Mai paid to air a television program, on two Los Angeles Vietnamese-language television stations, appeared in every episode of the program and discussed a range of insurance and investment-related topics, without obtaining prior approval from the firm or FINRA prior to airing the program. In addition, the content of the program was, at times, misleading, promissory, and/or unbalanced.” Mai was suspended from FINRA for four months and fined $10,000.

The term “securities fraud” relates to inappropriate and illegal activities. Principally, it relates to investor deception and market maipulation. Fraud can sometimes include the unauthorized trading, false or misleading representations and of course, Ponzi schemes. Many laws protect investors.

shutterstock_94632238-300x214The Securities and Exchange Commission (SEC) recently filed a complaint against former Gradient Securities, LLC (Gradient) and Cambridge Investment Research, Inc. (Cambridge) broker Terry Bahgat (Bahgat) working out of the Amherst, New York.  The SEC alleged that from December 2014 through September 2016, Bahgat misappropriated funds seven different clients by obtaining access to their brokerage accounts and then transferring either to himself or WealthCFO – a company that Bahgat controlled.  Bahgat operated his advisory business through WealthCFO Advisors, LLC and other firm WealthCFO Partners, LLC.

According to the SEC, in order to effectuate the fraud in some cases Bahgat had his assistant pose as his clients on telephone calls with the brokerage firms in order to obtain bill paying privileges.  The SEC alleged that Bahgat’s scheme continued until September 2016 when he then fled the U.S. for Egypt.  The Financial Industry Regulatory Authority (FINRA) also barred Bahgat from the securities industry after he failed to respond to a request for information in January.  The FINRA investigation involved a different questionable practice – whether Bahgat made misrepresentations in the sale of a variable annuity.

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shutterstock_160071281-300x168The law offices of Gana LLP are investigating Woodbridge Group of Companies and the investment funds it controls – a series of Woodbridge Mortgage Funds.  The Securities and Exchange Commission (SEC) has recently filed a case seeking documents in connection with its investigation of the Woodbridge Group of Companies for possible violations of the securities laws.  The California real estate and investment company has raised over $1 billion from investors under suspicious circumstances.  Namely that the firm is engaging in a nationwide investment fraud by offering the sale of unregistered securities through unregistered brokers.

The signs that the Woodbridge Funds are about to become a giant fraud debacle are all there.  Woodbridge and its agents have been sanctioned by multiple state regulators for offering unregistered securities.  Going back to May 2015, the Massachusetts Securities Division imposed a bar on the Woodbridge Mortgage Investment Funds and ordered the companies to permanently cease and desist from selling unregistered or non-exempt securities in the Commonwealth of Massachusetts.

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shutterstock_172399811-297x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Jay Jordan (Jordan), in August 2017, was sanctioned by FINRA and had a permanent bar imposed in connections with allegations of unsuitable investments in leveraged exchanged traded funds (Non-Traditional ETFs) based on the investor’s investment objectives, financial situation, risk tolerance, experience, and investment needs.  Jordan was previously terminated by his employer WFG Investments, Inc. (WFG).  WFG stated that Jordan was terminated due to his failure to follow certain policies of the firm including reporting a customer complaint, unauthorized use of personal email, and mischaracterization of an outside business activity.

In addition, Jordan has been subject to 14 customer complaints concerning his securities activity.  These investors have alleged millions in losses most likely stemming from FINRA’s allegations of unsuitable Non-Tradition ETF trading.

According to FINRA, Jordan become convinced that an economic crisis or stock market collapse was imminent and recommended concentrated Non-Traditional ETFs so that they clients could benefit from rising oil prices, rising interest rates, and declining equity values.  FINRA alleged that in June 2012, Jordan made widespread recommendations to his customers that they purchase Non-Traditional ETFs including: (1) UWTI (three times the daily performance of the S&P GSCI Crude Oil Index ER); (2) BOIL (two times the daily performance of the Bloomberg Natural Gas Subindex); and UGAZ (three times the daily performance of the S&P GSCI Natural Gas Index); (3) TBT and TMV (two and three times, respectively, the daily performance of the inverse of the ICE U.S. Treasury 20+ Year Bond Index); (4) SDS (two times the inverse of the daily performance of the S&P 500); (5) QID (two times the inverse of the daily performance of the NASDAQ-100 index); and (6) VIXY (matches the performance of the S&P 500 Short-Term Futures Index, which seeks to measure short-term volatility).

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shutterstock_123758422-300x200According to BrokerCheck records financial advisor Peter Doyle (Doyle), formerly associated with Morgan Stanley, has been subject to three customer complaints, one employment termination for cause, and one regulatory action.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Doyle has been accused by customers of unsuitable investment advice and unauthorized trading among other claims.

Doyle was barred by FINRA in July 2017 when he refused to appear for FINRA testimony in connection with its investigation into the conduct that led to his termination from Morgan Stanley.  Morgan Stanley had terminated Doyle in June 2016 after it made allegations involving adherence to industry rules and use of trading discretion.  The most recent complaint filed in February 2017 alleged unsuitable recommendations from June 2008 through June 2016.  The claim settled for $600,000.

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_178801067-300x200The law offices of Gana LLP continue to report on investor related losses and potential legal remedies due to recommendations to investor in oil and gas and commodities related investments.  According to BrokerCheck records, Customers have filed about six complaints with the Financial Industry Regulatory Authority’s (FINRA) against broker John Carolyn (Carolyn), a registered representative with UBS Financial Services Inc. (UBS) out of the firm’s Houston, Texas office location.

Many of the customer complaints against Carolyn allege a number of securities law violations including that the broker made unsuitable investments and overcenoncetrated clients in oil & gas related investments among other claims.  The most recent complaint was filed in February 2017 and alleged that from 2014-2016 the customer was unsuitably concentrated in oil and gas investments causing $70,000 in damages.  The complaint settled.  In another case filed in August 2016 a customer alleged that from 2012-2016 they were unsuitably concentrated in oil and gas investments causing $450,000 in damages.  The claim has been settled.

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