Securities Lawyer

Securities Arbitration – The Basics: What you need to know.

February 23, 2023 | by Staff Attorney

Securities arbitration is a method of resolving disputes between investors and their brokers or brokerage firms, which is governed by the Financial Industry Regulatory Authority (FINRA). FINRA is a self-regulatory organization that oversees the securities industry and provides a forum for resolving disputes between investors and their brokers or brokerage firms.

Securities arbitration through FINRA is a legal process that allows investors to seek redress for claims arising out of their investment accounts, such as fraud, breach of fiduciary duty, unsuitable investment recommendations, selling away or other misconduct. Securities arbitration is generally faster and less expensive than going to court, and the decision of the arbitrator is final and binding on both parties. It is important for investors to understand their rights and legal options if they believe they have been the victim of misconduct by their broker or brokerage firm.

To initiate a securities arbitration through FINRA, an investor must file a Statement of Claim with FINRA, which sets forth the facts and legal basis for the claim. The Statement of Claim must be filed within six years from the occurrence or event giving rise to the claim. However, the occurrence or event that gives rise to a claim is usually considered the date of damages, or the date a reasonable investor knew or should have known about the claim. While brokerage firms usually argue it is the date of purchase, most arbitration panels disagree with that analysis.

Broker Jerry Tuma Has Customer Suitability Complaints

October 6, 2022 | by Staff Attorney

Advisor Jerry Tuma (Tuma), currently employed by brokerage firm Independent Financial Group, LLC (Independent Financial) has been subject to at least five disclosures and customer complaints. According to a BrokerCheck report the customer complaints concern investment advisory activity and one complaint involves 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.

In January 2022 a customer complained that Tuma violated the securities laws by alleging that Tuma made investment recommendations that were not suitable and was not in line with stated objectives. The claim is currently pending and the investor seeks $200,000 in damages.

In January 2022 a customer complained that Tuma violated the securities laws by alleging that the client engaged CFS in an advisory relationship beginning in 12/2017. The client also alleged her account was not managed in accordance with her best interests, that certain management and product fees were excessive, and in inappropriate products given her risk profile. The claim is currently settled for $14,906 in damages.

First Allied Advisor Terry Anderson Terminated for Misconduct

August 30, 2022 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) that financial advisor Terry Morris Anderson (Anderson) was terminated by his employer and has been subject to at least six customer complaints during the course of his career. Mr. Anderson was most recently associated with First Allied Securities, Inc. (First Allied Securities). According to records kept by FINRA, Mr. Anderson’s customer complaints alleges Mr. Anderson recommended unsuitable investments in various investments. Unsuitable investment allegations involving oil & gas securities, private placements, and other alternative investments, among other allegations of misconduct relating to the handling of their accounts.

In March 2020, a customer complained that Mr. Anderson violated the securities laws by alleging that Mr. Anderson failed to invest the customer’s money. The claim settled in the amount of $8,000.

In September 2010, a customer complained that Mr. Anderson violated the securities laws by alleging that Mr. Anderson engaged in breach of fiduciary duty, and negligence, resulting in losses. The claim settled in the amount of $27,468.41.

In July 2010, a customer complained that Mr. Anderson violated the securities laws by alleging that Mr. Anderson engaged in negligence, breach of fiduciary duty, breach of contract, misrepresentation, and unsuitability. The claim settled in the amount of $626,661.98.

In April 2010, a customer complained that Mr. Anderson violated the securities laws by alleging that Mr. Anderson engaged in negligence, breach of fiduciary duty, misrepresentation, and unsuitability. The claim settled in the amount of $278,516.44.

National Securities Broker Viqas Akhtar Has Customer Complaints

October 26, 2021 | by Staff Attorney

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor Viqas Akhtar (Akhtar) has at least three disclosable events. Theses events include three customer complaints alleging that Akhtar engaged in some form of investment related misconduct in the handling of the client’s accounts. Akhtar is currently employed by National Securities Corporation (National Securities). Akhtar’s customer complaints alleges that Akhtar recommended unsuitable investments and engaged in unauthorized trading in different investment products including private placements relating to the handling of client accounts.

In March 2020 a customer complained that Akhtar violated the securities laws by alleging that Akhtar made unsuitable investments resulting in losses in the amount of $150,000 in the account. The claim settled for $37,500.

In March 2020 a customer complained that Akhtar violated the securities laws by alleging that Akhtar made unsuitable investments resulting in losses in the amount of $85,000 in the account. The claim is currently pending.

In October 2019 a customer complained that Akhtar violated the securities laws by alleging that Akhtar engaged in unauthorized trading resulting in losses in the amount of $8,000 in the account. The claim settled for $9,539.

Advisor Doron Kochavi Has Unsuitable Investment Complaints

October 16, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that broker Doron Kochavi (Kochavi), currently employed by Western International Securities, Inc. (Western International) has been subject to at least six customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Western International’s customer complaints allege that Mr. Kochavi recommended unsuitable investments in various investments, among other allegations of misconduct relating to the handling of their accounts.

In October 2019, a customer complained that Mr. Kochavi violated the securities laws by alleging that Mr. Kochavi breached his fiduciary duty. The claim alleges $4,000,000.00 in damages and is currently pending.

In August 2002, a customer complained that Mr. Kochavi violated the securities laws by alleging that Mr. Kochavi engaged in the recommendation of unsuitable investments, breach of fiduciary duty, and a failure to disclose material information regarding the investments. Damages were granted in the amount of $35,000.

In addition, older claims also involved allegations of similar misconduct. Claims from 1997 and 1999 involved allegations that Mr. Kochavi engaged in the recommendation of unsuitable investments.

Financial Advisor Gregory Williams Subject to Nine Investment Complaints

September 21, 2021 | by Staff Attorney

Advisor Gregory Williams (Williams), formerly employed by brokerage firm Forta Financial Group, Inc. (Forta Financial) has been subject to at least nine customer complaints. According to a BrokerCheck report several of 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.

In April 2021 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2013 and February 2021. The claim involves alternative investments and alleges $30,000 in damages and is currently pending.

In October 2020 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2014 and September 2020. The claim involves alternative investments and alleges $250,000 in damages and is currently pending.

In October 2020 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws likely between March 2012 and September 2020. The claim involves alternative investments and alleges $99,000 in damages and is currently pending.

Former Morgan Stanley Advisor Ken Hutkin Terminated For Undisclosed Activities

September 15, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Kenneth Hutkin, currently employed by Wedbush Securities Inc., (Wedbush) has been subject to at least five customer complaints during his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Hutkin’s customer complaints allege that Hutkin recommended unsuitable investments, engaged in churning, overcharged certain corporate security debts, and engaged in unapproved outside business practices.

In February 2020, a customer complained that Hutkin violated the securities laws by alleging that Hutkin engaged in unsuitable investment advice. The claim does not specify any amount with respect to damages. However, the complaint was denied.

In September 2018, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unapproved outside business activities, including payments for some such activities. Hutkin was terminated by his employer, Morgan Stanley, for these allegations.

In October 2008, a customer complained that Hutkin violated securities laws by alleging that Hutkin overcharged certain corporate debt securities. The claim settled in the amount of $52,958.

In June 1993, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unsuitable investment advice and churning. The claim settled in the amount of $23,000.

In June 1992, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unsuitable investment advice and churning. The claim settled in the amount of $130,000.

Merrill Lynch Financial Advisor Mark Jones Has Nine Investor Complaints

September 11, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Financial Advisor Mark Jones (Jones), currently employed by Merrill Lynch, has been subject to at least nine customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Jones’ customer complaints alleges that Jones recommended unsuitable investments in various investments, among other allegations of misconduct relating to the handling of their accounts.

In May 2019, a customer complained that Jones violated the securities laws by alleging that Jones engaged in material misrepresentations. The claim settled in the amount of $70,026.

In February 2014, a customer complained that Jones violated the securities laws by alleging that Jones engaged in unsuitable investment advice, and material misrepresentations. The claim settled in the amount of $26,250.

In April 2002, a customer complained that Jones violated the securities laws by alleging that Jones engaged in unsuitable investment advice. $400,000 in damages were granted.

Advisor Felipe Henao Accused of Unsuitable VIX Trading

April 12, 2021 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Felipe Henao Vargas (Henao), currently employed by Insigneo Securities, LLC (Insigneo Securities), has been accused by a customer of investing in a VIX related investment. ETFs that invest in the VIX are part of a group of group of ETFs considered to be leveraged exchanged traded funds or Non-Traditional ETFs.

As a background, Non-Traditional ETFs behave drastically different and have different risk qualities from traditional ETFs. While traditional ETFs seek to mirror an index or benchmark, Non-Traditional ETFs use a combination of derivatives instruments and debt to multiply returns on underlining assets, often attempting to generate 2 to 3 times the return of the underlining asset class. Non-Traditional ETFs are also used to earn the inverse result of the return of the benchmark.

However, the risks of holding Non-Traditional ETFs go beyond merely multiplying the return on the index. Instead, Non-Traditional ETFs are generally designed to be used only for short term trading as opposed to traditional ETFs. The use of leverage employed by these funds causes their long-term values to be dramatically different than the underlying benchmark over long periods of time. For example, between December 1, 2008, and April 30, 2009, the Dow Jones U.S. Oil & Gas Index gained two percent while the ProShares Ultra Oil and Gas, a fund seeking to deliver twice the index’s daily return fell six percent. In another example, the ProShares UltraShort Oil and Gas, seeks to deliver twice the inverse of the index’s daily return fell by 26 percent over the same period.

Advisor Stuart Pearl Sanctioned By Regulatory and Subject to Customer Complaints

April 8, 2021 | by Staff Attorney

According to BrokerCheck records financial advisor Stuart Pearl (Pearl), currently employed by International Assets Investment Management, LLC (International Assets) and formerly employed by David A. Noyes & Company (David A. Noyes) has been subject to five customer complaints, two terminations for cause, and one regulatory action during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Pearl concern allegations of unsuitable investments, unauthorized trading, and margin trading among other causes of action.

In June 2015 Pearl was terminated by Ameriprise Financial Services, Inc. (Ameriprise Financial) for violation of company policy related to use of discretion in non-discretionary accounts and complying with supervision.

In October 2017 FINRA sanctioned Pearl finding that Pearl consented to the sanctions and findings that he effected securities transactions in a customer’s account on several occasions on a discretionary basis without prior written authorization from the customer and without prior written acceptance of the account as discretionary from his member firm. FINRA also found that Pearl made unsuitable recommendations in two other customers’ joint brokerage account when he recommended the customers use margin to effect several trades. According to FINRA, the recommendations made by Pearl to purchase securities on margin were unsuitable in light of the customers’ investment objectives, risk tolerances, and their financial situation and needs. FINRA found that these purchases caused the account to be subject to seven margin calls during the relevant period.

In March 2019 David A. Noyes permitted Pearl to resign stating that Stuart Pearl resigned while on heightened supervision. The firm claims that Pearl had not followed his heightened supervision plan and would have been terminated had he not resigned.