Articles Posted in Suitability

shutterstock_186180719-300x216The securities lawyers of Gana LLP are investigating customer complaints against former LPL Financial LLC (LPL Financial) Broker Daniel Pugel (Pugel). According to BrokerCheck records, in March 2017, Pugel was “permitted to resign” from Financial Advocates Investment Management after allegedly violating investment-related statutes, regulations, rules, and/or industry standards of conduct, including FINRA Rule 2310 (suitability). Pugel has received three customer complaints.

In 2016 a customer alleged Daniel Pugel, while employed at Financial Advocates Investment Management, made unsuitable investment recommendations, failed in his supervisory duties, breached his fiduciary duty, and violated blue sky laws. The complaint settled in 2017 for $215,000.

In 2004 a customer alleged Daniel Pugel, while employed at Morgan Stanley, breached of contract, breached his fiduciary duty, made unsuitable recommendations, and committed fraud in connection to a mutual fund investment. The complaint resulted in an award to the customer of more than $95,900.

shutterstock_128655458-300x200The investment fraud lawyers of Gana LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Gregory Tucker. According to BrokerCheck, Tucker has a multitude of customer complaints mostly pertaining to unsuitability and misrepresentation.

In November 2016, a customer complaint was filed against Tucker alleging that the broker mishandled his client’s account during his employment at D.A Davidson & Co. Tucker allegedly made unsuitable and heavily concentrated recommendations. In addition, Tucker allegedly engaged in excessive trading in regards to the client’s account. The case is pending.

Another currently pending case against Tucker was filed in February 2016 for allegedly misrepresenting an investment product to his client. During the period of March 2009 through January 2016, Tucker allegedly made material and false representations of the municipal bonds that his client then bought. Additionally, the customer claims that Tucker allegedly made recommendations that were unsuitable and lacked diversity, which resulted in substantial portfolio loss for the client.

shutterstock_183554579-300x200Our law firm, Gana LLP, is investigating claims made by Financial Industry Regulatory Authority (FINRA) against broker Alan Rose. The customer complaints allege that Rose engaged in securities law violations, including making unsuitable investments in clients’ accounts. The most recent customer complaint against the broker was filed in January 2017. The customer alleges during the period of 2013 – 2016, Rose over-concentrated their portfolio in unsuitable investments. The alleged damages are worth over $100,000. The case is currently pending.

Another complaint was filed against Rose in May 2015 alleging that the broker made unsuitable recommendations to their account. During the period of November 2011 through January 2013, Rose allegedly misrepresented and recommended unsuitable purchases of Puerto Rico municipal bond funds and New York State bonds. The alleged damages were worth $500,000 and the case was settled at $84,500.

Rose entered the industry in 1983. He is currently employed at Wells Fargo Clearing Services, LLC and has been employed there since January 2013. His previous employment includes: UBS Financial Services (October 2007 – February 2013), Morgan Stanley Inc. (April 2007 – October 2007), and Morgan Stanley DW Inc. (July 1983 – April 2007).

shutterstock_168326705-199x300Our law firm, Gana LLP, is investigating claims made by Financial Industry Regulatory Authority (FINRA) against advisor Gary Rasmussen. Rasmussen’s BrokerCheck records show customer complaints that allege that Rasmussen engaged in securities law violations, including making unsuitable investments in clients’ accounts.

The most recent customer complaint filed against Rasmussen was filed in October 2016. Allegedly, Rasmussen recommended investment products that were unsuitable and highly risky. The alleged damages are worth $178,892.00. The case is still pending.

In September 2012, a customer filed a complaint against Rasmussen alleging that the financial advisor recommended highly unsuitable investment products. Allegedly, Rasmussen also violated state and federal securities laws such as: failure to properly supervise, breach of his fiduciary duty, and lack of due diligence in the investment. The customer alleges that there was $475,000 in damages and the case is still pending.

shutterstock_102242143-300x169The securities lawyers of Gana LLP are investigating the customer complaints against Sean Mcelduff (Mcelduff). Mcelduff has been subject to two customer complaints – both of which pertain to suitability concerns over recommendations for investment products. Mcelduff’s BrokerCheck records from the Financial Industry Regulatory Authority (FINRA) shows that the most recent customer complaint against Mcelduff was filed in December 2016. The customer alleged that Mcelduff made unsuitable recommendations of Puerto Rican municipal bonds. The alleged damages are worth $260,000. The case is still pending.

In January 2016, another customer complaint was filed against Mcelduff claiming that the broker allegedly purchased unsuitable bonds for the client. The alleged damages were priced at $21,000 and the case was settled for $12,000.

Brokers have a responsibility to treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

shutterstock_103681238-300x300The investment fraud lawyers of Gana LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Scott Goldman (Goldman). Goldman’s FINRA BrokerCheck record shows several disclosures mainly pertaining to unsuitable investments.

In December 2016, an elderly customer alleged that during Goldman’s employment at LPL Financial Corporation, he recommended highly unsuitable investments that were heavily concentrated in risky, leveraged precious metal products. In addition, the broker did not properly inform his client of the risks associated with such an investment. This dispute was settled in December 2016, and resulted in $10,000 penalty and Goldman was suspended from the industry.

Another case against Goldman was filed in October 2014 for allegedly making unsuitable recommendations, failing to supervise, and breaching his fiduciary duty during his employment at H. Beck Inc. The alleged damages were worth $250,000. The case was settled in November 2015 for $75,000.

shutterstock_95416924-300x225The investment fraud lawyers of Gana LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Michael Jay Sharenow (Sharenow). Sharenow’s FINRA BrokerCheck record shows several disclosures mainly pertaining to unsuitable investments.

In November 2016, a customer alleged that he or she instructed Sharenow to buy highly rated bonds but Sharenow instead bought two inappropriate securities. This dispute settled in November 2016 for the amount of $8,258.42.

A currently pending case against Sharenow was filed in October 2016 for allegedly over-concentrating a client’s portfolio during the period of 2012 to 2015 while he was employed at Wells Fargo Advisors. The clients claim that the alleged damages are greater than $810,000.00.

shutterstock_133831631-198x300Our firm’s investment attorneys are investigating a complaint filed by the Commonwealth of Massachusetts Securities Division (Massachusetts) against LPL Financial LLC (LPL) and the firm’s broker Roger Zullo (Zullo) Zullo alleging that Zullo fabricated the financial suitability profiles of numerous LPL clients, selling them scores of large, illiquid, unsuitable, high-commission variable annuities, at substantial upfront profits to himself and LPL.

The State of Massachusetts alleged that over the course of three years Zullo and LPL received more than $1,825,000 in variable annuity commissions alone and 98% of that amount represented commissions from the sale of the same annuity product – the Polaris Platinum III (B Shares) variable annuity.  The State found that Zullo bypassed LPL’s paper-thin compliance review process for these sales by fabricating client financial suitability information, such as age and liquid net worth.  Further, LPL apparently rewarded Zullo’s fraudulent practices with the honor of being included in LPL’s “Chairman’s Club” for top annuity production.

According to the State LPL was aware that Zullo repeatedly and openly sold only one product, with the same features and the same justifications, to almost every annuity client, and did nothing to stop it.  LPL was also alleged to have been aware that Zullo’s clients repeatedly incurring surrender charges and being charged high commission. According to one email from Zullo’s supervisor “It did very much seem to me that he had a pattern of switching everybody out of their annuities every 6 or 7 years and that he was getting commissions over and over again from the same clients.”  Massachusetts found that any concerns concerning Zullo’s practices were ignored.

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shutterstock_128655458-300x200Our law firm, Gana LLP, is investigating claims made by Financial Industry Regulatory Authority (FINRA) against broker James Vernon Regier (Regier), formerly associated with Summit Brokerage Services, Inc. The customer complaints allege that Regier engaged in securities law violations, including making unsuitable investments in clients’ accounts. The most recent complaint filed in July 2016 alleges that between 2010 and 2015, Regier engaged in unsuitable trading in a customer’s account by recommending purchases of publicly traded shares of United Development Funding IV (UDF). The complaint is currently pending. In April 2016, another investor filed a complaint and alleged unsuitable activity occurring in the investor’s account from April 2015 – March 2016, causing damages of greater than $5,000.00. That complaint is also currently pending. In January 2012, a customer filed a complaint alleging unsuitable trading activity in 2008. The claim was settled for $104,191.00.

Regier first became associated with FINRA in 2002. Below are the firms that Regier has been employed by and registered with throughout his career:

  • Washington Square Securities, Inc. (January 2002 – August 2002)

shutterstock_177082523Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor Joshua Arnold (Arnold) currently registered with TradingBlock, alleging negligence, unsuitable recommendations, negligent supervision, breach of fiduciary duty, and breach of contract among other claims.  According to brokercheck records Arnold has been subject to ten customer complaints and three regulatory actions.

In September 2016 a customer filed a complaint alleging negligence and unsuitable recommendations that caused $250,000 in damages.  The broker denied all claims.  The claim is current pending.

In November 2015 another customer filed a complaint that Arnold failed to handle the account properly causing a tax penalty.  The claim was resolved for $37,500.

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