Selling Away

Advisor Kieth Baron Sanctioned By Regulator Over Undisclosed Securities Dealings – Investor Recovery Options

February 11, 2024 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Kieth Baron (Baron) has been accused by The Financial Industry Regulatory Authority (FINRA) of engaging in undisclosed outside business activities (OBAs) and private securities transactions. According to records kept by FINRA, Baron was last employed by Equity Services, Inc. (Equity Services) through January 2022. According to BrokerCheck, Baron has 11 disclosures on his record including two regulatory actions, two financial disclosures, one employment termination, and six customer complaints. If you have been a victim of Kieth’s alleged misconduct our firm may be able to assist you in recovering funds.

According to FINRA, Baron was named in a FINRA complaint alleging that he made material misrepresentations to investors in connection with his recommendation of a Company stock. The FINRA complaint alleges Baron failed to disclose to the couple that he was a consultant for the Company. FINRA is also claiming that Baron later made additional material false statements to an investor in connection with a buyback of the couple’s shares of the Company.

The complaint also alleges that Baron had an ongoing business relationship with Company A. Baron expected to receive compensation and received $284,890 in compensation from Company A. FINRA found Baron failed to provide prior written notice to his member firm concerning his business relationship with Company A. The complaint further alleges that Baron participated in private securities transactions by recommending investors purchase 4,348,000 shares of Company A’s common stock for $359,806. According to FINRA, Baron failed to provide written notice to his firm of his role in the sale of Company A’s common stock prior to participating in the sale.

Allen Hershberg Barred Over Real Estate Investments – Investor Recovery Options

May 18, 2023 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Allen Hershberg (Hershberg) has been accused by his former employer of engaging in business investment activities including undisclosed outside business activities (OBAs) and private securities transactions. According to records kept by The Financial Industry Regulatory Authority (FINRA), Hershberg was employed by Morgan Stanley Smith Barney, LLC (Morgan Stanley) at the time of the activity. If you have been a victim of Hershberg’s alleged misconduct our firm may be able to assist you in recovering funds.

Hershberg has been subject to regulatory action by FINRA and termination by Morgan Stanley. In July 2022, Morgan Stanley alleged that it had “Concerns Investigation regarding the representative’s unapproved outside real estate investments, as well as concerns regarding the representative’s recommendation of those same outside real estate investments to Firm clients and others, including through limited liability companies the representative created.”

With respect to the FINRA action, the regulator found that Hershberg consented to sanctions and findings that that he failed to provide documents and information requested by FINRA in connection with its investigation into allegations made in a Form U5 filed by his member firm. FINRA found that Morgan Stanley permitted Hershberg to resign due to concerns regarding his unapproved outside real estate investments, as well as concerns regarding his recommendation of those same outside real estate investments to firm clients and others, including through limited liability companies he created.

A review of Hershberg’s disclosed OBAs includes Ian Media Networks Advisor, CPV, LLC, Oak Park, Worthfield 1 LLC, and Dorchester 1 LLC. In addition, Hershberg discloses that he engages in rental property ownership and it appears that some of these entities are related to that business.

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.

Scott Reed Barred Over Pebblekick Investment Scheme – Investor Recovery Options

August 28, 2022 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Scott Reed (Reed) has been accused by clients of engaging in fraudulent investment activities including undisclosed outside business activities (OBAs) and private securities transactions. According to records kept by The Financial Industry Regulatory Authority (FINRA), Reed was employed by Wells Fargo Clearing Services, LLC (Wells Fargo) at the time of the activity. If you have been a victim of Reed’s alleged misconduct our firm may be able to assist you in recovering funds.

Reed has been subject to regulatory action by both FINRA and the State of Arizona. With respect to the FINRA action, the regulator found that Reed consented to sanctions and findings that he participated in private securities transactions totaling at least $3.5 million without providing prior written notice to or obtaining advanced approval from his member firm. Reed solicited individuals, including at least two firm customers, to invest in securities issued by a software and web development company believed to be Pebblekick, Inc. Reed participated in these investments away from the firm by providing written materials about the company to investors, and by communicating with them orally, by email and text message about the company and encouraging them to invest. Reed is alleged to have received selling compensation of $191,340 from the company for his role in soliciting and facilitating the investments. It was also claimed that Reed had his own personal financial interest in the company and personally invested over $200,000 in the company.

Rhett Bedwell Accused of Selling Ponzi Scheme Investments – Investor Recovery Options

October 19, 2021 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Rhett Bedwell (Bedwell) has been accused by clients of engaging in fraudulent investment activities including undisclosed outside business activities (OBAs) and private securities transactions. According to records kept by FINRA Bedwell was employed by LPL Financial LLC (LPL Financial) at the time of the activity. If you have been a victim of Bedwell’s alleged misconduct our firm may be able to assist you in recovering funds.

Rhett Bedwell is accused by investors and was investigated for unsuitably recommending investors to invest in a Ponzi scam involving Small World Capital and Graysail Capital. In March 2021 FINRA barred Bedwell after finding that Bedwell consented to sanctions and findings that he refused to produce information and documents requested by FINRA during the course of its review of an amended Form U5 filed by his former member firm. FINRA’s investigation stemmed from a disclosure that Bedwell had been identified in a pending customer arbitration alleging that he moved a client’s IRA to a different administrator and used forged documentation to invest the claimant’s money in a Ponzi scheme.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling 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.

Advisor Dwight Dykstra Sanctioned By Regulator Over Senior Living Real Estate Promissory Note Sales – Investor Recovery Options

June 14, 2021 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Dwight Dykstra (Dykstra) has been accused by The Financial Industry Regulatory Authority (FINRA) of engaging in undisclosed outside business activities (OBAs) and private securities transactions. According to records kept by FINRA Dykstra was employed by Vision Brokerage Services, LLC (Vision Brokerage) a the time of the activity and is now registered Alternative Investment Advisors, LLC (Alternative Investment). If you have been a victim of Dykstra’s alleged misconduct our firm may be able to assist you in recovering funds.

According to FINRA, the regulator sanctioned Dykstra after he consented to the sanction that he participated in private securities transactions without providing prior written notice to his member firm. The findings stated that, while registered through with his firm, Dykstra participated in private securities transactions by soliciting investments in promissory notes issued by a company raising capital to develop a senior living real estate project. FINRA found that Dykstra contacted prospective investors to inform them of the investment opportunity, provided marketing materials to interested investors, participated in communications between the issuer and interested investors, and facilitated the sale of approximately $2 million of promissory notes to 21 investors. FINRA also found that Dykstra was paid $67,500 in selling compensation for his participation in the transactions.

Advisor Christopher Roumayeh Sanctioned Over Undisclosed Investments – Investor Recovery Options

September 14, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Christopher Roumayeh (Roumayeh) has been accused by a financial regulator of engaging in undisclosed outside business activities (OBAs) and private securities transactions among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Roumayeh was employed by his prior employer Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) prior to being investigated concerning his activities. If you have been a victim of Roumayeh’s alleged misconduct our firm may be able to assist you in recovering funds.

In May 2020, Roumayeh was sanctioned by FINRA which found that he consented to sanctions and the findings that he engaged in outside business activities without providing prior written notice to his member firm. FINRA found that Roumayeh and a firm customer purchased a franchise involved in the professional video gaming industry. FINRA alleged that Roumayeh managed the franchise’s day-to-day operations, formed corporate entities related to the franchise’s operations, served as an officer and director for them, and solicited prospective investors in the franchise. Roumayeh further is alleged to have concealed his relationship with the entities by forming them in his wife’s name and named her as the sole authorized representative on an entity’s bank account.

In addition, FINRA also found that Roumayeh engaged in other OBAs such as forming and managing a separate limited liability company that he purchased commercial real estate through. Roumayeh then is alleged to have made false statements to the firm on annual compliance questionnaires concerning his outside business activities. Finally, FINRA also found that Roumayeh participated in a private securities transaction by soliciting and facilitated the investment of a publicly-traded company in the franchise. Roumayeh’s is alleged to have participated in identifying other potential investors, responding to questions from the company during its due diligence, and negotiating the terms and structure of the company’s investment. To facilitate the company’s $5.5 million investment, FINRA claims that Roumayeh formed a new holding company that he sold and issued shares of preferred stock to the company through.

Advisor Arthur Hoffman Barred Over Zima Global Ventures Fraud – Investor Recovery Options

August 3, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Arthur Hoffman (Hoffman) has been accused by a financial regulator of engaging in the fraudulent sale of securities among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Hoffman was employed by his prior employer Ameriprise Financial Services (Ameriprise) prior to being investigated concerning his activities. If you have been a victim of Hoffman’s alleged misconduct our firm may be able to assist you in recovering funds.

In June 2020, a customer filed a complaint alleging that Hoffman recommended the claimants invest $172,688.03 in Zima Global Ventures, LLC a/k/a Zima Digital Assets, an alleged fraudulent Ponzi scheme. The claim is currently pending.

In May 2020, Hoffman was barred by FINRA which found that he consented to sanctions and the findings that he failed to provide documents and information requested by FINRA. The findings stated that FINRA opened an investigation in response to a disclosure filed by Hoffman’s member firm, which stated that Hoffman had been suspended related to outside business activities and private securities transactions.

In May 2020 Hoffman was terminated by Ameriprise after the firm claimed that he terminated for company policy violations related to outside business activities and private securities transactions.

Woodbury Financial Advisor James Kennedy Barred From Industry Over Unapproved Business Activity

June 21, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor James Kennedy (Kennedy) has been accused by a financial regulator of engaging in unapproved business activities among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Kennedy was employed by his prior employer Woodbury Financial Services, Inc. (Woodbury Financial) prior to being investigated concerning his activities. If you have been a victim of Kennedy’s alleged misconduct our firm may be able to assist you in recovering funds.

In April 2020, FINRA brought a regulatory action and fount that Kennedy consented to sanctions and findings that he failed to provide documents and information requested by FINRA in connection with its investigation into a tip received. FINRA found that Kennedy provided partial but incomplete responses to FINRA’s requests and then subsequently ceased cooperating with the investigation. FINRA also determined that Kennedy’s former firm filed a Form U5 disclosing his termination and explaining that he was permitted to resign for engaging in an unapproved outside business activity involving a financial transaction with a couple of clients.

Kennedy’s disclosed outside business disclosures include being an insurance agent, Kennedy Investment Consultants LLC, and Hoy Road Properties. It is unclear whether or not the allegations involve any of these disclosed entities.

Transamerica Advisor Gautam Arora Terminated Over Unapproved Securities Sales

May 27, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Gautam Arora (Arora) has been accused by his former employer engaging in unapproved investments among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Arora was terminated by his prior employer, Transamerica Financial Advisors, Inc. (Transamerica Financial) concerning his promissory note sales. If you have been a victim of Arora’s alleged misconduct our firm may be able to assist you in recovering funds.

In December 2019 Transamerica Financial terminated Arora after alleging that firm received information indicating that the representative solicited various individuals to participate in unapproved investments away from the firm. The firm further alleged that the representative entered into lending arrangements and promissory notes with these individuals without receiving prior approval from the firm.

Arora’s outside business activities disclosed on his publicly available BrokerCheck report include World Financial Group, Inc., Real estate broker, and Keller William Realty.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling 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.