Selling Away

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.

Morgan Stanley Terminates Broker Robert Beck Over Outside Business Activities

September 20, 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 Robert Beck (Beck). According to BrokerCheck records Beck is subject to three customer complaints and one employment separation for cause.

According to Morgan Stanley, the firm terminated Beck after raising concerns relating to employee’s disclosures relating to outside activities. 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 nature and scope of Beck’s OBAs and/or private securities transactions. According to BrokerCheck records Beck disclosed that he is involved in outside business activities including rental property in Philadelphia. 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 Financial Advisor Zahir Walji Over Private Securities Transactions

September 17, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating the regulatory investigation filed by The Financial Industry Regulatory Authority (FINRA) against broker Zahir Walji (Walji). According to BrokerCheck records Walji is subject to five customer complaints one FINRA matter and one employment separation for cause. The FINRA regulatory matter concerns an investigation surrounding alleged sales of private securities transactions. (FINRA No. 2012034370501).

According to FINRA, from April 2011 through October 2012, while Walji was associated with UBS Financial Services, Inc (UBS), Walji participated in two outside business activities (OBAs) and participated in six private securities transactions without providing prior written notice of the OBAs or the private securities transactions to his firm. In addition, FINRA alleged that although Walji provided notice to UBS of two additional OBAs, he did not comply with the restrictions that UBS placed on him. As a result FINRA determined that Walji violated FINRA Rules. 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 nature and scope of Walji’s OBAs and private securities transactions. According to BrokerCheck records Walji disclosed that he is involved in outside business acitvities including KML, Inc. – a real estate related company, Round Rock – a real estate company, and Triad Equities, LLC – a real estate company. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance to clients of those side practices.

FINRA Bars Financial Advisor Douglas Simanski Over Converting Client Funds

September 17, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating the regulatory investigation filed by The Financial Industry Regulatory Authority (FINRA) against broker Douglas Simanski (Simanski). According to BrokerCheck records Simanski is subject to five customer complaints one FINRA matter and one employment separation for cause. The FINRA regulatory matter concerns the agencies attempt to investigate the circumstances surrounding alleged sales of private securities transactions and client fund conversion. (FINRA No. 2016049621301). When Simanski refused to cooperate with the investigation, FINRA automatically barred Simanski from the industry.

According to FINRA, Simanski consented to the sanction and findings related to an investigation into allegations for conversion of funds. 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 nature and scope of Simanski’s outside business activities and private securities transactions. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance to clients of those side practices.

Simanski entered the securities industry in 1995. From 1999 until June 2016 Simanski was registered with Next Financial Group, Inc. out of the firm’s Altoona, Pennsylvania office location. At that time Simanski was terminated over allegations that he sold fictitious investments and converted the funds for his own personal use and benefit.