Selling Away

Ken Balser Barred by FINRA Over Allegations of Private Securities Transactions

January 16, 2017 | by Staff Attorney

Our 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.

Tye Williams Barred by FINRA Over Allegations of Converting Customer Funds

January 16, 2017 | by Staff Attorney

Our 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.

Broker Ralph Fetrow Discharged Over Allegations of Outside Business Activities

December 7, 2016 | by Staff Attorney

Our 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.

Arkansas Sanctions Financial Advisors Raymond Adcock and Charles Ferrill Over Talon Securities Sales

November 22, 2016 | by Staff Attorney

Our firm is investigating claims made by Arkansas Securities Commissioner against brokers Raymond Adcock (Adcock) and Charles Bailey Ferrill, Jr. (Ferrill) concerning their raising of funds for a business plan to operate a hedge fund through two companies – Talon LLC created in February 2011 and Talon LP created in February 2012 (Talon Entities). (See In re Raymond Dickie Adcock, Case No. S-14-0008). Both brokers were registered with The Financial Industry Regulatory Authority (FINRA) at the time.

Both Ferrill and Adcock were most recently registered with broker-dealer Regal Securities, Inc. (Regal), an Arkansas registered broker-dealer firm based in Glenview, Illinois. According to the State of Arkansas, while employed by Regal, Ferrill worked in the Regal office supervised by Adcock.

According to the consent order, Talon LLC served as the general partner and investment manager of Talon LP and no individuals other than Adcock and Ferrill had control over the Talon Entities at any point in time. Further, Ferrill managed the Talon Entities out of Regal’s branch location and used the same telephone and facsimile numbers as the Regal branch office to conduct Talon business. However, the Talon entities never registered with the State of Arkansas.

FINRA Sanctions Financial Advisor Michael Barranco Over Private Securities Transactions

November 15, 2016 | by Staff Attorney

Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Michael Barranco (Barranco). According to BrokerCheck records Barranco is subject to one regulator complaint, one employment separation for cause, and one financial disclosure. The FINRA regulatory matter concerns an investigation surrounding alleged sales of private securities transactions. (FINRA No. 2015048273301).

According to FINRA, between 2010 and 2015, Barranco was involved in almost 40 private securities transactions with three different issuers. In 2010, Barranco requested and received permission from LPL to act as a consultant and provide business planning advice to an entity (TMG) founded by two of his customers. FINRA found that Barranco also participated in the solicitation of investments by firm customers and others in 13% Senior Notes issued by TMG,

FINRA found that between November 2010 and February 2011, Barranco participated in 35 transactions through which 27 individuals invested at least $2,087,000 in the TMG notes. In addition, FINRA also found that in 2014, the founders of TMG purchased a distressed real estate development (IBH) and issued 12% Senior Notes which Barranco recommended to two of his customers who invested $750,000. 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”.

Kevin Kuhlow Barred Over Private Securities Transactions

October 31, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating the employment termination filed with The Financial Industry Regulatory Authority (FINRA) by LPL Financial LLC (LPL) involving broker Kevin Kuhlow (Kuhlow) out of the firm’s Los Gatos, California office. According to BrokerCheck records Kuhlow has been subject to seven customer complaints and two financial disclosures.

According to LPL, the firm terminated Aguilar in February 2016 after alleging his conduct included unapproved investments in violation of firm policy. 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”.

Subsequently, in March 2016, FINRA brought a regulatory action and barred Kuhlow from the industry. (FINRA No. 2016048430801). FINRA alleged that Kuhlow consented to the sanction that he refused to produce documents and information requested by FINRA in connection with its investigation into the allegations that he had violated LPL’s policies by directing clients to an unapproved investment.

Morgan Stanley Terminates Broker Jamie Aguilar Over Private Securities Transactions

October 21, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating the employment termination filed with The Financial Industry Regulatory Authority (FINRA) by Morgan Stanley involving broker Jamie Aguilar (Aguilar) out of the firm’s San Diego, California office. According to BrokerCheck records Aguilar has been subject to three customer complaints.

According to Morgan Stanley, the firm terminated Aguilar in May 2016 after alleging his conduct included an outside financial transaction between the financial advisor and a client of the firm that was not disclosed 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 time it is unclear the nature and scope of Aguilar’s private securities transactions. However, according to brokercheck records, Aguilar has disclosed OBAs listed as including Events Magnificent, Inc. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, real estate brokers, or insurance agents to clients of those side practices.

FINRA Sanctions Broker Darrin Farrow Over Private Securities Transactions

October 18, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating the employment termination filed with The Financial Industry Regulatory Authority (FINRA) by Royal Alliance Associates, Inc. (Royal Alliance) and the regulatory action filed by FINRA involving broker Darrin Farrow (Farrow). According to BrokerCheck records Farrow has been subject to one customer complaint, one employment separation for cause, and two regulatory actions.

According to Royal Alliance, the firm terminated Farrow after alleging Farrow received information that he was involved in an outside business activity not approved by the firm. Thereafter, in June 2016, FINRA suspended Farrow after alleging he participated in two undisclosed outside business activities (OBAs) without disclosing his involvement to his firm. (FINRA No. 2015045751101). FINRA found that Farrow founded an unincorporated entity that provides consulting services to the cannabis industry and also cultivates, produces, and manufactures cannabis and he also formed a Delaware limited-liability company that grows cannabis and supplies it to dispensaries throughout Oregon. According to FINRA Farrow participated in undisclosed private securities transactions with firm customers involving the sale of $1 million of membership interests.

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”. According to brokercheck records Farrow has disclosed OBAs listed as including MonsterShares LLC – an investment related business, Mad Farmaceuticals, DBF Properties, LLC, Adviceware, and MM Herndon LLC. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, real estate brokers, or insurance agents to clients of those side practices.

Woodbury Financial Terminates Broker David Ross Over Private Securities Transactions

September 22, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating the employment termination filed with The Financial Industry Regulatory Authority (FINRA) by Woodbury Financial Services, Inc. (Woodbury Financial) involving broker David Ross (Ross). According to BrokerCheck records Ross is subject to one customer complaint, one employment separation for cause, and six judgment or liens.

According to Woodbury Financial, the firm terminated Ross after alleging Ross failed to disclose an outside business activity (OBA) and accepted loans form a client in addition to violating other firm policies and procedures. Often times such filings indicate that the broker is engaging potentially in private securities transactions, promissory notes, or loans away from 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 time it unclear the scope of Ross’ OBAs and/or private securities transactions. According to brokercheck records Ross has disclosed OBAs listed as including Ross Financial Planning, Inc., Belmont University, and First Shot Foundation. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, real estate brokers, or insurance agents to clients of those side practices.

Morgan Stanley Terminates Broker Brian Sak Over Outside Business Activities

September 21, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating the employment termination filed with The Financial Industry Regulatory Authority (FINRA) by Morgan Stanley involving broker Brian Sak (Sak). According to BrokerCheck records Sak is subject to one customer complaint and one employment separation for cause, and one judgment or lien.

According to Morgan Stanley, the firm terminated Sak after alleging Sak engaged in outside real estate investment with a client that was not appropriately disclosed to the firm. Often times such filings indicate that the broker is engaging potentially in private securities transactions, promissory notes, or loans away from 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 time it unclear the scope of Sak’s OBAs and/or private securities transactions. According to BrokerCheck records Sak has one customer complaint alleging that the broker sold a promissory note concerning real estate and that Sak recommended that the client invest in an outside real estate investment opportunity of which the Sak was a manager from 2011 to 2014. The complaint alleges $250,000 in damages and the dispute is currently pending. In addition, Sak disclosed a civil judgment of $2,355. An inability to pay debts may also be an indicator that a broker may solicit funds form his clients.