Articles Posted in Suitability

shutterstock_24531604-200x300The investment lawyers of Gana LLP are investigating claims against Robert Clarke (Clarke). According to BrokerCheck records, Clarke has five disclosures, four of them being customer complaints.

In August 2017, a customer alleged Clarke misrepresented the nature of an investment and the purchase of the investment in the customer’s accounts. The customer is seeking $500,000 in this pending dispute.

In March 2016, a customer alleged Clarke misrepresented and made an unsuitable recommendation for the customer to invest in collateralized mortgage obligations. This dispute settled for $120,000.
In April 2014, a customer alleged unsuitable investment, transfer of accounts handled negligently, lack of fiduciary duty, and lack of supervision. This dispute settled for $77,205.

False representations include either written or oral statements containing misrepresentations or omissions of information that are material to an investor and induce the purchase, sale, or holding of a security. Under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 a misrepresentation or omission of a fact is material if a reasonable investor might have considered the fact important in the making of the investment decision. Also the Financial Industry Regulatory Authority (FINRA) Rule 2020 also prohibits members from effecting “any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.”

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shutterstock_184430645-300x225According to BrokerCheck records, Elaine LaCerte (LaCerte), also known as Elaine Diones and Elaine Diones Helzer, was suspended by the Financial Industry Regulatory Authority (FINRA) in August 2017.

LaCerte was suspended for allegedly engaging in an unsuitable pattern of short-term trading of Unite Investment Trusts (UITs) in over 100 customer accounts. Without admitting or denying the findings, LaCerte consented to the sanctions and the entry of findings. The findings stated that “in connection with these accounts, LaCerte repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates. In addition, on more than 100 occasions, LaCerte recommended that her customers use the proceeds from the short-term sale of a UIT to purchase another UIT with identical investment objectives. LaCerte’s recommendations caused the customers to incur unnecessary sales charges, and were unsuitable in view of the frequency and cost of the transactions.” LaCerte has been banned from the industry for six months and was ordered to pay a $5,000 fine.

Moreover, LaCerte has been subject to four customer disputes.

In November 2016, a customer alleged LaCerte misrepresented material facts with respect to the purchase of a municipal bond. This dispute settled for $25,000.

In August 2016, a customer alleged LaCerta recommended unsuitable investments. This dispute settled for $24,464.76.

In July 2016, a customer alleged LaCerta misrepresented material facts with respect to investment risks. This dispute settled for $4,000.

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shutterstock_12144202-300x200The investment lawyers of Gana LLP are investigating claims against John Eglow (Eglow). According to BrokerCheck records, Eglow, who works out of Delray Beach, Florida, has been subject to four customer disputes.

In May 2017, a customer alleged she was overcharged for trades. This dispute settled for $48,758.

In July 2016, a customer alleged Eglow made unsuitable recommendations, resulting in unrealized losses. This dispute settled for $115,000.

In March 2015, a customer alleged that the terms and provisions of investments were misrepresented by Eglow. This dispute settled for $3,205.73.

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.

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shutterstock_189302963-300x194The investment lawyers of Gana LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against broker James Cox (Cox).

According to Cox’s Brokercheck records, he has been sanctioned by FINRA because he allegedly recommended unsuitable annuity transactions to a customer and received commissions of $25,460 in connection with the exchange. Without admitting or denying the findings, Cox consented to the sanctions and to the entry of findings. Cox was suspended from FINRA for four months and fined a total of $35,460.

In April 2017, Cox was terminated from Stifel, Nicolaus & Company, Incorporated because of a “lack of confidence after settlement of customer complaint and nondisclosure of outside business activity”

Moreover, Cox has been subject to four customer disputes.

In June 2012, a customer alleged that when the customer retired, Cox made unsuitable recommendations, made material misrepresentations, and breached his fiduciary duty. This dispute settled for $25,000.

In June 2014, a customer alleged that Cox failed to monitor the customer’s account and invested his assets in unsuitable investments. This dispute is pending.

Subsequently, In November 2014, Cox allegedly provided misleading advice to a customer who applied for two annuities to replace older annuities. This dispute settled for $480,000.

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shutterstock_64859686-300x300The investment lawyers at Gana LLP are investigating customer complaints against Pennsylvania Broker/Investment Advisor Nadav Baum (Baum). According to BrokerCheck records, Baum has been subject to fourteen customer complaints and two regulatory sanctions. The customer complaints allege that Baum engaged in securities law violations, including making unsuitable investments in client’s accounts.

In March 2017, the New Jersey Bureau of Securities sanctioned Baum after he allegedly failed to comply with the terms of a supervisory agreement. He was ordered to cease and desist and to pay a fine of $6,000.

In August 2009, the Financial Industry Regulatory Authority (FINRA) sanctioned Baum following allegations he executed discretionary trades without written authorization in the account of a deceased customer and executed discretionary trades in other accounts without authorization. He was issued a 30-day suspension and a fine of $15,000.

shutterstock_70999552-300x200The investment lawyers of Gana LLP are investigating claims against Aegis Capital broker, Paul Falcon (Falcon). Falcon allegedly recommended unsuitable investments, executed unauthorized trades, made excessive transactions and recommended investments that performed properly.

According to BrokerCheck records, Falcon has received four customer complaints and one pending customer complaint.

In April 2017, a customer alleged Falcon recommended unsuitable investments, executed unauthorized trades, made excessive transactions and recommended investments that performed poorly. The customer is seeking $190,000 in damages and the complaint is still pending.

In 2001, a customer alleged Falcon failed to follow the customer’s instructions. The complaint settled for $2,000.

In 1999 a customer alleged, while employed at Citicorp Investment Services, Falcon failed to fully explain an investment. The complaint settled for $15,000.

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shutterstock_176198786-300x200The investment lawyers of Gana LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against John Leonard (Leonard), working out of Toledo, Ohio. Leonard allegedly failed to request termination of a previous suspension within three months resulting in an automatic bar from association with any FINRA member in all capacities.

According to BrokerCheck records, Leonard had been suspended from associating with any FINRA member in any capacity for allegedly failing to respond to a FINRA request for information. Leonard was barred by FINRA after he failed to request termination of this suspension.

Leonard has been named in five customer complaints and one that is still pending.

The most recent complaint was in June 2016 and alleged unsuitable recommendations. This dispute settled for $25,000. Another complaint in June 2016 alleged unsuitable investments. This dispute settled for $24,000. In October 2016, a different client alleged unsuitable investments. This dispute settled for $60,000. In September 2016, another customer alleged unsuitable investment recommendation were made in 2013 and 2014. This dispute settled for $50,000.

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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).