Articles Posted in Securities Fraud

shutterstock_188631644-300x225Thomas Howes (Howes), working out of Bethesda, MD, has been subject to five customer complaints. According to BrokerCheck records, Howes has been accused by customers of unsuitable investment advice and trades.

In one complaint from 2012, customers alleged that from August 2006 until July 2011, there were excessive and unsuitable trades made in their brokerage accounts and a variable annuity that resulted in losses. They alleged damages of $300,500 and the dispute was settled for $130,000.

In another complaint, customers alleged the transactions in their account were not suitable and were awarded a settlement amount of $229,369.99.

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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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shutterstock_186772637-300x199Gana LLP is examining claims made by the United States Securities and Exchange Commission against broker Michael Siva (Siva). According to BrokerCheck records, Siva and five other individuals allegedly engaged in securities fraud and profited by over $5 million by trading on insider information about dozens of impending corporate mergers, acquisitions, and tender offers.

Siva entered the industry in 1996. He is currently employed at Morgan Stanley and has worked there for 8 years. Between October 2014 and April 2017, Siva allegedly used inside information to make profitable trades for his clients, earning commissions for himself in the process. Mr. Siva also allegedly traded on behalf of himself and his wife based on two of the tips he received.

Securities fraud (a/k/a investment fraud) stems from a variety of deceptive practice in the stock or commodities markets. Securities fraud stems from intentionally false information or the omission of material information that induces an investor to make purchase or sales decisions. Securities fraud violates state and federal securities laws. Securities fraud encompass a wide range of illegal activity, including violations of section 10(b) of the Securities Exchange Act of 1934, insider trading, and other illicit activity on trading floors of stock and commodities exchanges. Insider trading is the illegal practice of trading on the stock exchange to one’s own advantage through having access to confidential information.

shutterstock_172154582-300x197The securities fraud lawyers of Gana LLP are investigating customer complaints concerning alleged misrepresentation and an employment separation filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Elaine Marie Zito (Zito). According to BrokerCheck records, Zito has been in the securities industry since 1997 and is currently working for Newbridge Securities Corporation (Newbridge) in Scottsdale, Arizona.

The most recent customer complaint against Zito was filed in April 2017 alleging that she misrepresented the client’s account regarding the purchase of a variable annuity back in 2006. Zito was employed at Woodbury Financial Services, Inc during the alleged misrepresentation. The case is currently pending.

During November 2016, Zito was discharged from Questar Capital Corporation (Questar) for allegedly violating the firm’s rules and regulations in relation to unauthorized use of discretion of mutual funds.

From having spoken to many victims of securities fraud – the hardest thing for many investor victims is asking for help.  More specifically, admitting to anyone that they had been taken advantage of.  Many victims express feelings of shock, disbelief, and often times shame for having been, apparently, an easy mark for the fraudster.

The truth is there is nothing to be a ashamed of.  Fraud is a multi-billion dollar business ensnaring tens of thousands of victims a year.  The only real question is – what are you going to do about it?  Our investment attorneys are here to help.  We’ll let you know what the potential avenues of recovery are.  Consider reaching out to our firm and refusing to be another victim while considering the following SEC statistics concerning their regulatory efforts in 2016.

In 2016, the SEC filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers.

shutterstock_94632238-300x214The experienced securities fraud lawyers of Gana LLP are investigating multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Andrew Bruce Elsoffer (Elsoffer). According to Elsoffer’s FINRA BrokerCheck records, there are several disclosures on his record pertaining to securities fraud, misrepresentation, unsuitability, breach of fiduciary duty, and negligence amongst other allegations.

Elsoffer entered the securities industry in 1994 and was only registered with Merrill Lynch, Pierce, Fenner & Smith, Inc. until November 2011. He is currently employed at Stifel Nicolaus & Co., Inc. since November 2011. He was previously employed at:

• Bank of America (December 2009 – October 2011)