Selling Away

John Randall “JR” Gladden Accused of Selling Church Fund Loans Away from Brokerage Firm

February 22, 2016 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating a regulatory complaint filed (Disciplinary Proceedings No. 2014038996201) by The Financial Industry Regulatory Authority’s (FINRA) against broker J. Randall Gladden (Gladden). FINRA alleged in the complaint that Gladden was associated with Securities Equity Group and participated in creating Church Development Fund, LLC (Church Development Fund) and a successor fund, Church Fund LLC (Church Fund) for the purposes of making loans to churches for refinancing their existing real estate loans. According to FINRA, Gladden participated in the management of the Church Development Fund and Church Fund and served as a governing member of the funds’ respective managers, CDF Managing Partners, LLC (CDF Managing Partners) and CF Manager, LLC (CF Manager).

According to the complaint, from May 2011 through September 2013, Gladden solicited seven investors to invest more than $2.1 million in the funds. The fund represented that it would pay investors a 6% per annum “Priority Return” on their investment. CDF Managing Partners was also to receive a monthly “Operator Fee” based upon a percentage of the outstanding principal amount of the loan portfolio of the Fund and a “Loan Fee” based upon a percentage of the original principal amount of each loan.

The conduct allegedly engaged in by Gladden is also referred to as “selling away” in the industry. 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. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

Advisor Kevin Wanner Accused of Selling Fraudulent Securities

February 15, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating regulatory complaints and the termination by Questar Capital Corporation (Questar) of broker Kevin Wanner (Wanner). Questar discharged Wanner alleging that The North Dakota Securities Department (NDSD) issued a cease and desist alleging that Wanner sold time certificate of deposit securities purporting to represent an investment in an FDIC insured interest bearing account and further misrepresented to the investors that their funds would be deposited with the FDIC member financial institutions represented. Instead, the funds were deposited into accounts owned and controlled by Wanner for his own purpose. Thereafter, on December 31, 2015, the NDSD revoked Wanner’s securities license in the state. On January 11, 2016, FINRA permanently barred Wanner form the securities industry.

According to new sources, Wanner and Precision Financial Services were barred from engaging in the business of insurance and from withdrawing any moneys from any banking or financial accounts. The order alleges that two people were given fraudulent certificates of deposit which cannot be authenticated by the banks listed on the documents.

The conduct allegedly engaged in by Wanner is also referred to as “selling away” in the industry. 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. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

FINRA Investigates Customer Complaints Against Broker Eric Kuchel

February 12, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) and the agency’s complaint against broker Eric Kuchel (Kuchel). According to BrokerCheck records Kuchel has been the subject of at least five customer complaints, one employment termination for cause, and one financial matter. Many of the customer complaints against Kuchel allege unauthorized trading among other claims. In addition, one complaint filed in June 2015 alleges failure to conduct due diligence on five non-traded private placement transactions resulting in damages of $499,999.

In November 2015, Kuchel’s then brokerage firm LPL Financial LLC (LPL) terminated Kuchel for cause for failing to appear for an interview with FINRA. Thereafter, In January 2016, FINRA filed a complaint (Disciplinary Proceeding No. 2015047966701) alleging that on numerous occasions he failed to appear at for testimony in connection with an investigating into mutual fund transactions and whether he participated in a private securities transaction, a practice known as “selling away” in the industry.

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. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

LPL Financial Broker Alfred Talens Accused of Selling Unregistered Securities

February 5, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating customer complaints and the termination by LPL Financial, LLC (LPL) of broker Alfred Talens (Talens). There is at least one customer complaint against Talens alleging that the broker made unsuitable investments in connection with the sale of a variable annuity. The customer also alleges that the broker sold an unregistered security and claimed damages of $500,000. The conduct allegedly engaged in by Talens is also referred to as “selling away” in the industry. It is unclear from public disclosures the nature of the outside business but Talens public disclosures disclose that the broker has outside business activities including Ascension Wealth Management, a DBA for insurance and tax preparation, and AWM Consulting.

In addition, there is one employment separation disclosed. LPL alleged that Talens violated firm policy regarding outside business activities and borrowed money from clients. Thereafter, FINRA sent Talens a request for documents and information which the broker refused to respond to. Accordingly, FINRA automatically barred Talens from the securities industry on July 7, 2015.

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. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

Broker Garland Benton Terminated For Private Securities Transactions

January 14, 2016 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Garland Benton (Benton). There are at least 3 customer complaints against Benton, one of which appears to be filed in connection with the solicitation of private securities transactions. In addition, there is one employment separations disclosed. One customer complaint alleges that Benton caused $946,670 in damages by failing to conduct due diligence on an investment while the firm has responded that the Benton was not a representative of the customer. In April 2015, Reef Securities Inc. (Reef) terminated Benton stating that the broker was permitted to resign after allegations were made that Benton failed to follow firm policies and procedures regarding private securities transactions from 2008. The conduct allegedly engaged in by Benton is also referred to as “selling away” in the industry.

Benton entered the securities industry in 2002. Between October 2002 and April 2015, Benton was associated with Reef.

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. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

SEC Files Complaint Against Former Edward Jones Broker Bernard Parker For Stealing Client Funds

December 31, 2015 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Bernard Parker (Parker). The Securities and Exchange Commission (SEC) announced fraud charges against Parker, a former broker with Edward Jones through his DBA Parker Financial Services located in Indiana, Pennsylvania. Parker has been accused of raising at least $1.2 million of investor money that was in reality used to remodel his house and pay other bills among other uses.

The SEC alleged that Parker raised more than $1.2 million from his brokerage customers and others who Parker told were purchasing real estate tax lien certificates that would earn returns of 6-9% annually. Specifically, Parker told prospective investors that Parker Financial Services would use funds to purchase tax liens placed by municipalities on properties primarily in Florida, Arizona, and Colorado. However, the SEC found that Parker pooled the money he raised into several bank accounts and routinely deposited only a portion of the money into a bank account and took the remainder in cash for himself.

The SEC alleged that Parker only used a small amount of investor funds to purchase tax liens and instead used their money to remodel his home, make car payments, and pay bills for his father-in-law. For instance, according to the SEC Parker withdrew more than $650,000 in investor funds in cash from teller transactions, ATM withdrawals, and checks. Parker additionally spent approximately $197,000 of investor money in other transactions, $150,000 through personal checks, and $169,000 for online bill payments. In total Parker made approximately $188,000 in interest payments to earlier investors in an effort to keep his investment scheme from being discovered.

Constellation Wealth Advisors Terminates Brandon Gioffre After Customers Complain about TMG Energy Systems Investment

December 25, 2015 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Brandon Gioffre (Gioffre). There are at least 3 customer complaints against Gioffre. In addition, there is one employment separations disclosed. The most recent customer complaint alleged that three individuals sent a letter to the firm on July 15, 2015 alleging that Gioffre, acting on behalf of the firm, solicited investments in TMG Energy Systems and they suffered damages of $881,657 through the investments. According to Constellation Wealth Advisors LLC (Constellation Wealth Advisors), the firm neither offered the investment nor approved of the private securities transaction or outside business activity engaged in by Gioffre. The conduct allegedly engaged in by Gioffre is also referred to as “selling away” in the industry.

Gioffre entered the securities industry in 1998. Between June 2009 and June 2014, Gioffre was associated with Morgan Stanley. From July 2014 until August 2015, Gioffre was associated with brokerage firm Constellation Wealth Advisors until he was discharged from the firm.

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. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

FINRA Bars Broker Daniel Kasbar In Connection With Undisclosed Outside Business Activities

December 6, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating Daniel Kasbar (Kasbar) bar from the securities industry. The Financial Industry Regulatory Authority (FINRA) recently brought an enforcement action (FINRA No. 2015045744901) against Kasbar alleging that between 2010 and 2015, Kasbar engaged in an outside business activity beyond the scope of the approvals provided by his FINRA member firm – also referred to as “selling away” in the industry – HD Vest Investment Services (HD Vest) and LPL Financial, LLC (LPL). On September 17, 2015 FINRA requested that Kasbar provide documents and information. Kasbar did not provide any of the requested documents and information drawing an automatic bar from the industry.

Kasbar entered the securities industry in February 2011. Between February 2011 and March 2014, Kasbar was associated with HD Vest. From March 2014 until June 2015, Kasbar was associated with brokerage firm LPL until he was discharged from the firm.

It is unclear from the regulatory filings what the nature of the outside business activities were but from publicly available information, Kasbar’s brokercheck disclosures reveal several outside business activities including Kasbar Financial, Daniel G. Kasbar & Company, Inc. – a general contracting company, Emerald Village Professional Plaza, Kasbar Consulting – a tax prep, accounting, bookkeeping firm, and A R K Construction Company, Inc.

FINRA Bars Broker Clifford Morgan In Connection With the Sale of Over Promissory Note Sales

December 5, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating Clifford Morgan (Morgan) bar from the securities industry. The Financial Industry Regulatory Authority (FINRA) recently brought an enforcement action (FINRA No. 2011025610501) against Morgan alleging that between November 2011 and December 2014, while he was associated with brokerage firm Uhlmann Price, Securities, LLC (Uhlmann Price) Morgan participated in private securities transactions – also referred to as “selling away” in the industry – without providing notice to his firm. FINRA also found that in engaging in the private securities transactions Morgan made material misrepresentations to customers and also participated in numerous outside business activities without providing the required notice to the firm.

Clifford Morgan entered the securities industry in January 2004. Between January 2007 and December 2014, Morgan was associated with Uhlmann Price. On December 5, 2014, Uhlmann Price filed a Form U5 reporting that Morgan had been “permitted to resign” with the explanation that the ”registered representative participated in private securities transactions in conflict with firm policies.”

It is unclear from the regulatory filings what companies were invested in but from publicly available information, Morgan’s brokercheck disclosures reveal several outside business activities including US College Planning, W&C Business Management, Strategis Wealth Consulting, and Strategis Wealth Advisory Group.

Source Capital Group Discharges Broker Robert Turpin Over Unauthorized Business Activities

November 12, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Robert Turpin (Turpin) was recently discharge from Source Capital Group, Inc. (Source Capital) relating to the firm’s allegations that Turpin engaged in unapproved and undisclosed outside business activities – also referred to in the industry as “selling away.”

It is unclear the nature of the outside business activities from publicly available information at this time. However, Turpin’s Brokercheck disclosures reveal numerous outside business activities including:

Tartesso West Multi Family LLC