Securities Fraud

Jonathan G. Sorensen Barred Financial Industry Over Alleged Misuse of Customer Funds

September 22, 2013 | by Staff Attorney

Jonathan G. Sorensen (Sorensen) has been barred by the Financial Industry Regulatory Authority (FINRA) after he failed to respond to the agency’s inquiries concerning an investigation concerning the possible misuse of customer funds in his management of limited partnership investment fund.

Sorensen first became registered with FINRA on September 9, 2005. Since that time he was registered until April 4, 2013, with Coker & Palmer, Inc. (Coker & Palmer). According to public records, Sorensen is also a managing member of Higher Standard Insurance and Faith Terrace Holdings, LLC, a purported real estate company.

On April 5, 2013, FINRA staff requested that Sorensen appear for an interview on April 12, 2013. The agency sought information from Sorensen as part of an investigation into his management of a limited partnership investment fund while associated with Coker & Palmer. It was alleged that Sorensen had converted or misused investor funds and falsified documents in connection with his management of the partnership fund.

David Mura Accused of Selling Unregistered Securities and Churning

September 9, 2013 | by Staff Attorney

David Mura was recently barred by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) over allegations concerning the sale of unregistered securities away from his associated brokerage firm.

From September 2002 through April 2011, Mura was a registered representative and branch office manager with J.P. Turner & Co., LLC (J.P. Turner), a broker-dealer headquartered in Atlanta, Georgia. Thereafter, Mura was associated with Aegis Capital Corp. from April 2011 until October 2012. According to the SEC, from mid-2007 through 2012, Mura led a team of individuals that managed several limited liability companies (LLCs) including Charge-On Demand LLC (COD), Innovations Group Enterprises LLC (IGE), and Stucco LLC and directed and participated an effort to solicit investors in the sale of unregistered promissory notes issued by the LLCs (LLC Promissory Notes).

According to the SEC’s order, Rising Storm Technologies LLC (“Rising Storm”) was created 2006 to pursue various business ideas. Mura invested in Rising Storm in 2008 and caused the LLCs to take over Rising Storm’s business. Edward Tackaberry (Tackaberry), a resident of Fairport, New York was allegedly employed by Mura as a product salesman. Tackaberry had been previously barred from associating with any broker or dealer based on a September 2007 case brought by the SEC accusing Tackaberry of securities fraud.

SEC Issues Concerns Over Private Oil and Gas Offerings

September 7, 2013 | by Staff Attorney

Private securities offerings of oil and gas ventures pose a substantial danger for investor fraud. According to the Securities and Exchange Commission (SEC), there has been an increase in the number of civil fraud cases related to oil and gas private placements. Investing in private placement offerings carries unique risks and private oil and gas offerings have additional risks for investors to be aware of and to consider.

The SEC’s Investor Alert listed common red flag sales pitches that fraudulent oil and gas investments often make to investors including:

Sales pitches referring to high oil and gas prices;

What is Churning?

September 1, 2013 | by Staff Attorney

“Churning” is essentially investment trading activity that serves little useful purpose or is inconsistent with the investor’s objectives and is conducted solely to generate commissions for the broker. Churning is also a type of securities fraud.

Recently, the National Adjudicatory Council (“NAC”) provided a detailed description of the elements and factors evaluated in determining a claim of churning. The NAC affirmed a Financial Industry Regulatory Authority (FINRA) finding that Alan Jay Davidofsky (Davidofsky) engaged in unauthorized trading, excessive trading, and churning in a customer’s account. The panel barred Davidofsky from the financial industry for the unauthorized trading, imposed a separate bar for the excessive trading and churning, and ordered Davidofsky to pay a fine of $11,741 as disgorgement of the financial benefit earned through the misconduct.

As the NAC ruling explained, NASD Rule 2110 requires brokers to “observe high standards of commercial honor and just and equitable principles of trade.” NASD Rule 2310(a) provides that in recommending securities, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer based upon the customer’s financial situation and needs. Included in this rule is the obligation of “quantitative suitability,” which focuses on whether the number of transactions within a given timeframe is suitable in light of the customer’s financial circumstances and investment objectives.