Articles Posted in Selling Away

shutterstock_85873471-300x200Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Thomas Vilord (Vilord), formerly associated with brokerage firms Summit Brokerage Services, Inc. (Summit Brokerage) and SagePoint Financial, Inc. (SagePoint).  According to brokercheck, FINRA found that Vilord consented to the sanction that he participated in undisclosed private securities transactions involving more than $347,500 in unregistered corporate debenture notes sold to customers of his member firm.  FINRA found that Vilord assisted these customers in making the investments by preparing transaction paperwork and providing the customers with information about the company issuing the notes.  FINRA also stated that Vilord lacked a reasonable basis to recommend the notes because he failed to conduct adequate due diligence on the offering because Vilord’s knowledge of the company was limited to his conversations with the company’s owner, information contained on the company’s website, and Google searches.

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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

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shutterstock_172399811-297x300Our law offices are continuing its investigation and the recent developments in the Dawn Bennett (Bennett) case.  Recently the Financial Industry Regulatory Authority (FINRA) filed a complaint alleging that Bennett sold $6 million in promissory notes concerning her retail clothing business – DJBennett.com owned by DJB Holdings, LLC.  As a background, we previously reported that The Securities and Exchange Commission (SEC) filed fraud charges against Bennett, a Maryland-based financial services firm and founder/CEO of Bennett Group Financial Services accusing her of grossly inflating the amount of managed assets and exaggerating the investment returns actually obtained for customers.

Thereafter, on July 11, 2016, the SEC barred Bennett from the securities industry for violating federal securities rules by for making material misrepresentations and omissions regarding her assets under management. See ln the Matter of Bennett Group Financial Services, LLC & Dawn J. Bennet, File No. 3-16801.  Bennett also was ordered to cease and desist from any further violations of the federal securities rules, pay disgorgement of $556,102, and pay a civil penalty of $600,000.

FINRA continued investigating Bennett’s activities and alleged in its recent complaint that Bennett, while associated with Western International Securities, Inc., had a retail clothing business called DJBennett.com owned by DJB Holdings, LLC.  FINRA found that during 2015 Bennett sold approximately $6 million in DJB convertible notes and promissory notes guaranteed by DJBennett.com, to approximately 30 investors. FINRA also uncovered evidence that Bennett may have misappropriated investors’ money, committed fraud, and engaged in undisclosed outside business activities and private securities transactions.

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shutterstock_138129767-300x199Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Joseph Likens (Likens).  According to brokercheck, in Likens failed to respond to FINRA’s requests for information resulting in a bar.  FINRA stated that Likens refused to appear for on-the-record testimony related an investigation into allegations that he may have engaged in private securities transactions.  At this time the scope of Likens activities and the specific investments are not reported.  However, Likens disclosed outside business activities involving PWA Network.

The FINRA investigation followed Likens’ termination from his previous employer LPL Financial LLC (LPL) in May 2016.  Likens worked out of a d/b/a Cornerstone Wealth Management.  At that time, Likens was terminated after allegations were made that he engaged in trading away from the firm.  In November 2016, a customer alleged that Likens sold away from the firm an investment made in 2011 causing $120,000 in damages.  The claim is currently pending.

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shutterstock_187532306-300x200Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Brian Sak (Sak).  According to brokercheck, Sak consented sanctions and an entry of findings that he failed to provide documents and information requested by FINRA during the course of its investigation into allegations that he solicited a client to invest in an outside business.  FINRA’s investigation followed Morgan Stanely’s termination of Sak in May 2016 after the firm stated that it had concerns related to outside real estate investment with a client that was not appropriately disclosed to the firm.

At this time it is unclear the total scope and extent of these outside business activities and private transactions but according to Sak’s disclosures he is involved in Southside Holdings which is engaged in real estate rentals.  To date five customers have come forward to complaint about investment losses related to Sak’s real estate transactions.

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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

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shutterstock_179203760-300x300Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Perry De Leeuw (De Leeuw) – a/k/a Perry De Leeun, Perry Deleeuw.  According to brokercheck, in June 2016 De Leeuw failed to respond to FINRA’s requests for information resulting in a bar.

The FINRA investigation followed De Leeuw’s termination from his previous employer, PFS Investments Inc. (PFS Investments) in April 2016.  At that time, PFS Investments terminated De Leeuw alleging that he engaged in unapproved outside business activities and failed to adequately cooperate with the firm in investigating a customer complaint.

That customer complaint filed in April 2016 alleged that in 2015 the customer invested $163,350 with De Leeuw to become a distributor for a company called Waterbos.  In total De Leeuw has been subject to at least four customer complaints concerning outside business activities and private securities transactions.

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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

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shutterstock_69882820-300x228Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against brokers Neal Moon (Moon) and Natalie Fogiel Moon (Fogiel).  According to the FINRA complaint, from February 2012 to August 2015, Moon participated in nine private securities transactions and Fogiel, his wife, participated in six private securities transactions in which six customers invested a total of $2.64 million in three different entities.  FINRA claimed that Moon and Fogiel failed to provide Waddell and Reed (Waddell), their brokerage firm, with prior written notice of their participation in the private securities transactions.

Among the businesses that Moon and Fogiel are accused of soliciting clients to invest in include BOXX Technologies, NMN BOXX, Total Operating LLC, TO Investments, Hoffbrau Steaks, and CCBRAU, Ltd

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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

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shutterstock_184920014-300x199Our firm is investigating claims made by Stifel, Nicolaus & Company, Incorporated (Stifel Nicolaus) when the firm terminated broker Jon Schmidhammer (Schmidhammer).  According to the firm, Schmidhammer was discharged in July 2016 after allegation were made that Schmidhammer resigned after his arrest for allegedly stealing money from a client.

According to Schmidhammer’s brokercheck records Schmidhammer has no disclosed outside business activities.  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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

In October 2016 a customer filed a complaint alleging that Schmidhammer engaged in unsuitable management of their accounts, unauthorized trading, breach of fiduciary duty, and conversion.  The complaint alleges damages of $500,000.  The claim is currently pending.

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shutterstock_120556300-300x300Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) when the regulator barred broker Ken Balser (Balser).  According to FINRA settlement, Balser consented to sanctions that he refused to appear for testimony and provide documents and information to FINRA concerning allegations that he engaged in private securities transactions.

In July 2016, Cetera Advisors LLC (Cetera) discharged Balser for cause alleging that Balser engaged in private securities transactions.

According to Balser’s brokercheck records Balser has at least three disclosed outside business activities.  These activities include a d/b/a Secure Wealth Management.  In addition, Balser disclosed a fixed insurance business and Dave Ramsey Radio Show Sponsor.  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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

Balser entered the securities industry in 1999.  From March 2012 through October 2013 Balser was associated with LPL Financial LLC.  Thereafter, from October 2013 through July 2016 Balser was registered with Cetera out of the firm’s Colorado Springs, Colorado office location.

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shutterstock_163885049-300x200Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) when the regulator barred broker Tye Williams (Williams).  According to FINRA settlement, Williams consented to sanctions that he failed to produce documents and information to FINRA. In addition, FINRA stated that the documents and information requested related to an investigation regarding a customer complaint alleging that Williams converted over $1,000,000 from customers’ accounts, made unsuitable investment recommendations, and engaged in unauthorized transactions and mismanaged assets.

The complaint made in April 2016 alleged that from mid 2004 until 2015, Williams mismanaged their finances by exceeding the scope of his authority and recommended unsuitable investments in ventures like Smashburger.  The complaint alleges damages of $1,000,000.  The claim is currently pending.

According to Williams’ brokercheck records Williams has at least six disclosed outside business activities.  These activities include DC Rightside, LLC which is involved with Smashburger franchise.  Also disclosed is Tye Williams Financial Services, Inc., Gold Star Equestrian, LLC, One Source Advisors Group, LLC, and Fellowship of Christian Athletes dfw.  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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

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shutterstock_103476707Our firm is investigating claims made by Castleview Partners, LLC (Castleview Partners) when the firm terminated broker Ralph Fetrow (Fetrow).  According to the firm, Fetrow was discharged in September 2016 after allegation were made that Fetrow violated firm policies and was under investigation for possible violations of firm policies and procedures prohibiting trading away and outside business activities.

According to Fetrow’s brokercheck records Fetrow disclosed outside business activities including Painted Hill Farms, Financial Planning Association, Shippensburg University, RAMS 88 Inc, and Ralph Fetrow Consulting.  At this time it is unclear whether the allegations stem from one of these disclosed entities or another business practice.  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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

Fetrow entered the securities industry in 1999.  From October 2008 through December 2015 Fetrow was associated with Invest Financial Corporation.  Since February 2016, Fetrow has been registered with Kovack Securities Inc. out of the firm’s Lemoyne, Pennsylvania office location.

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