Articles Posted in Selling Away

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shutterstock_157018310-300x200The law offices of Gana Weinstein LLP are currently investigating claims that advisor Jun (Justine) Zhou (Zhou) was discharged by her employer after being accused of offering securities not reported to the company.  According to BrokerCheck records, Zhou is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm The Leaders Group.  In addition, Zhou disclosed one regulatory complaint. If you have been a victim of Zhou’s alleged misconduct our firm may be able to assist you in recovering funds.

In November 2019 FINRA filed a regulatory action alleging that Zhou consented to the sanction and findings that she between April 2017 and June 2018, through a small real estate company she wholly owned and controlled, participated in the sale of $9,050,000 in membership interests in private real estate funds managed by a third party and $5,000,000 in a promissory note with that third-party fund manager. FINRA found that the fund membership interests and the promissory note were securities, involved 15 transactions, and seven investors.  FINRA determined that Zhou’s real estate company received $179,000 in compensation from the third-party fund manager.  In addition, FINRA alleged that on June 4, 2018, Zhou formed Zhou Fund I LLC (Zhou Fund), a private real estate fund managed by Zhou’s real estate company.  Zhou is alleged to have subsequently filed a notice of exempt offering of securities with the Securities and Exchange Commission related to twelve transactions in June and July 2018 through which Zhou and her real estate company sold $2,000,000 in membership interests in Zhou Fund to twelve investors.

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shutterstock_188383739-300x300The law offices of Gana Weinstein LLP are currently investigating claims that advisor Bobby Coburn (Coburn) engaged in undisclosed outside business activities (OBAs) and private securities transactions that were not approved by the brokerage firm.  Coburn, formerly registered with Securities America, Inc. (Securities America) was subject to a regulatory investigation and barred form the industry according to records kept by The Financial Industry Regulatory Authority (FINRA).  In addition, Coburn disclosed one employment termaintion for cause and two customer complaints.

In August 2019, FINRA alleged that Coburn accepted a bar from the financial industry, after consenting to sanctions and to the entry of findings that he refused to provide FINRA with requested information and documents. FINRA stated that Coburn’s member firm had terminated his association and stated on his Form U5 that he was involved in the solicitation of multiple clients to invest in an unapproved private securities transaction and engaged in the settlement of a related customer’s complaint without the firm’s knowledge or consent.

In March 2019 Securities America discharged Coburn and accused him of misconduct.

At this time it is unclear what the activity was that was the focus of FINRA’s investigation or the scope of Coburn’s activities.  Coburn’s publicly available BrokerCheck information discloses one OBA called Born to Retire which appears to be an insurance sales business.  It is unknown whether the activity investigated by FINRA involves any of these entities.

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shutterstock_189276023-300x198The law offices of Gana Weinstein LLP are currently investigating claims that advisor Bryan Clark (Clark), formerly associated with Madison Avenue Securities, LLC (Madison Securities), was accused of selling securities without informing his brokerage firm.  According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) Clark has three customer complaints, one bankruptcy disclosure, and one regulatory action. If you have been a victim of Clark’s alleged misconduct our firm may be able to assist you in recovering funds.

In August 2019 FINRA brought a regulatory action against Clark alleging that  Clark consented to the sanction and to the entry of findings that he refused to appear and provide on-the-record testimony during the course of FINRA’s investigation into whether he willfully failed to disclose a bankruptcy, failed to disclose outside business activities and participated in private securities transactions.

At this time it is unclear what business activities and the private securities transactions refer to.  Clark’s disclosures list several business activities including Preservation Capital Group, LLC and Value Health + Life Insurance Serves.

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shutterstock_186772637-300x199The law offices of Gana Weinstein LLP are currently investigating claims that advisor John Howley (Howley), formerly associated with Park Avenue Securities LLC (Park Avenue), was accused of selling securities without informing his brokerage firm.  According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) Howley has seven customer complaints, one regulatory action, and one employment termination for cause.  Howley has been accused by multiple customers of selling fraudulent investments in Global Credit Recovery.  If you have been a victim of Howley’s alleged misconduct our firm may be able to assist you in recovering funds.

In September 2019 FINRA brought a regulatory action against Howley alleging that  Howley consented to the sanction and to the entry of findings that he refused to appear and provide an on-the-record testimony requested by FINRA. FINRA stated that it requested an on-the-record interview for testimony in connection with its investigation into allegations reported by Howley’s member firm in a Form U5 that he failed to disclose private securities transactions to the firm and referred clients to outside investments.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling fraudulent securities sales through OBAs.  The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws.  In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm.  Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

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shutterstock_62862913-259x300The law offices of Gana Weinstein LLP are currently investigating claims that advisors Gurpreet Chandhoke (Chandhoke) and Stephen Shea (Shea) are subject to a complaint filed by The Financial Industry Regulatory Authority (FINRA) concerning their actions selling VII Peaks Capital to investors.  The two representatives were registered with the same brokerage firms at relatively the same time.

FINRA alleged that over the course of more than three years, between March 2014 and August 2017, Chandhoke and Shea consistently failed to meet their obligations to disclose private securities transactions and other outside business activities (OBAs) to the FINRA member firms with which they were associated.  FINRA claims that Chandhoke separately engaged in unethical business-related misconduct by structuring deposits of cash into multiple bank accounts to evade federal reporting requirements and making false statements to a member firm to obtain a line of credit.

In total, between March 2014 and March 2017, FINRA alleged that Chandhoke and Shea participated in private securities transactions totaling $9,902,425 without providing written notice to their employer member firms.  FINRA alleged that in April 2009, Chandhoke and Shea co-founded VII Peaks Capital LLC (VII Peaks Capital), an investment advisory company that is registered with the Securities and Exchange Commission (SEC).  FINRA found that in October 2013, Chandhoke and Shea, through VII Peaks Capital, created VII Peaks BDC Investors, LLC (VII Peaks BDC Investors).  VII Peaks BDC Investors was alleged by FINRA to be an offering to provide an opportunity for the prior investors in the Co-Optivist Funds to continue to participate in the investments but also to raise funds to offset start-up costs associated with a new managing broker-dealer for the Co-Optivist Funds.

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shutterstock_182004416-300x200The law offices of Gana Weinstein LLP are currently investigating claims that advisor David Volpe (Volpe) engaged in private securities transactions and borrowed customer funds that were not approved by his brokerage firm.  Volpe, formerly registered with First Financial Equity Corporation (First Financial) and LPL Financial LLC (LPL Financial) was subject to an investigation by The Financial Industry Regulatory Authority (FINRA) over these allegations.  In addition, Volpe disclosed one bankruptcy filing, and two employment terminations for cause.

In August 2019 FINRA alleged that Volpe consented to the sanctions resulting in a bar from the industry and to the entry of findings that Volpe refused to produce information and documents requested by FINRA in connection with an investigation into whether he engaged in a private securities transaction or borrowed funds from a customer.

In April 2019 Volpe was discharged by First Financial after the firm claimed that Volpe failed to notify firm of private securities transaction involvement and violation of firm policy regarding borrowing funds from a client.

In December 2018 Volpe was discharged by LPL Financial after the firm claimed that Volpe violated the firm’s private securities transactions policy for involvement in capital raising efforts without prior disclosure.

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shutterstock_189276023-300x198The law offices of Gana Weinstein LLP are currently investigating claims that advisor Michael Rappa (Rappa) engaged in undisclosed and unapproved private securities transactions.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Rappa, formerly registered with Foresters Equity Services, Inc. (Foresters Equity) out of San Diego, California was barred from the financial industry and disclosed at least two customer complaints.  According to a BrokerCheck report, Rappa’s customer complaints allege that Rappa made unsuitable private securities transaction recommendations.

In February 2019, FINRA stated that Rappa consented to the sanction and to the entry of findings that from August 2016 to July 2017, he engaged in undisclosed and unapproved private securities transactions totaling $2,731,287. The findings stated that Rappa solicited investors to purchase promissory notes relating to a purported real estate investment fund.

In May 2018, a customer alleged that in 2016, Rappa made unsuitable private securities transaction recommendations. The customer has requested $75,000 in damages. This dispute is currently still pending.

In February 2018, another customer similarly alleged that in 2017, Rappa was recommending unsuitable private securities transactions. The customer has requested $700,000 in damages. This dispute is currently still pending.

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shutterstock_152149322-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor James Anderson (Anderson), formerly associated with Ameritas Investment Corp. (Ameritas), and operating under the d/b/a name Central Financial Group was terminated by Ameritas in February 2019.  Anderson was accused by Ameritas, upon conclusion of internal investigation, that he was found to have engaged in the sales of Indexed Annuities and Promissory Notes away from the firm.

In addition, in 2013 FINRA had found that during the exam period, Anderson was found to have sold Indexed Annuities that were not listed on the firm’s approved list.  The transactions equaled to an undisclosed outside business activity, to which prompt/prior notice was not given to the firm.

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”.  At this point is unclear what securities or business activities Anderson was engaged in.  His public disclosures state only that he operated out of his d/b/a firm Central Financial Group.

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shutterstock_177792281-300x198According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Daniel Levine (Levine), formerly associated with First Financial Equity Corporation (First Financial), in January 2019, was sanctioned and barred from the securities industry by FINRA over accusations of potentially selling unapproved products.

In January 2019 FINRA alleged that Levine consented to the sanctions and findings that he failed to provide FINRA with requested documents and information for the regulator’s investigation into allegations that he engaged in undisclosed outside business activities, solicited a senior firm customer to borrow funds for an outside business activity, and executed unauthorized trades.

In August 2018 Levine was discharged from First Financial due to FINRA’s inquiry into his activities.  In July 2018, Levine was terminated from Morgan Stanley due to allegations concerning unapproved outside activity.

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”.

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shutterstock_113632177-300x249According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Robert Jamison (Jamison), formerly associated with PNC Investments, in December 2018, was sanctioned and barred from the securities industry by FINRA over accusations of potentially selling unapproved products.

In December 2018 FINRA alleged that Jamison consented to the sanction and to the entry of findings that he refused to provide testimony to FINRA related to allegations that he, in connection with private securities transactions, referred customers to an individual who was not registered and who may have recommended or sold unsuitable securities to those customers.

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”.

At this time it is unclear the nature and scope of Jamison’s activities.  Jamison’s disclosures include any outside business activities (OBAs) disclosures.  The only disclosure is an involvement with Crump Life Insurance.

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