Articles Posted in Unauthorized Trading

shutterstock_61142644-300x225Our firm is investigating customer disclosure claims concerning broker John Nelson Crook (Crook). Crook’s FINRA BrokerCheck record shows several disclosures of allegations concerning churning (excessive trading, unauthorized trading, unsuitability, and breach of fiduciary duty. His BrokerCheck records also show a disclosure concerning an employment separation after allegations.

In July 2015, Crook was discharged from Raymond James & Associates Inc due to the findings that that the financial advisor allegedly did not respond in a timely manner to a supervisory review of trading activity. In addition, Crook allegedly did not provide a legitimate explanation for the trading activity in a certain client’s account, which lead to his termination from the firm in July 2015.

The most recent customer complaint against Crook was received in November 2015.During the period between August 2006 and June 2015, Crook allegedly engaged in excessive and unauthorized trading. Crook allegedly also recommended unsuitable investment products to his client, fraudulently misrepresented, and breached his fiduciary duty. The alleged damages are worth over $4 Million and the case is currently pending.

shutterstock_181783781-200x300In June 2016, Next Financial Group, Inc. (Next Financial) broker Dion Padilla (Padilla) was subject to a regulatory action brought by The Financial Industry Regulatory Authority (FINRA) alleging Padilla effected an unauthorized purchase of a variable annuity for a customer and misrepresented that the investment was not a variable annuity. According to FINRA, the customer stressed to Padilla that they did not want any of their funds invested in a variable annuity due to the high fees associated with variable annuities and because of their desire for liquidity.  But instead of following the customer’s instructions, FINRA found that Padilla presented a variable annuity application to the customer and assured him that the application was not for a variable annuity.  In addition, FINRA found that Padilla caused the customer to invest an additional $558,889 into the variable annuity by falsely claiming that the investment purchased was not a variable annuity.  FINRA found these statements to be misrepresentations that were all false and misleading.

In addition to the FINRA sanctions, Padilla has been subject to four customer complaints – many of which involve claims concerning variable annuity investments.  The law offices of Gana LLP are currently investigating customer complaints concerning this broker.

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shutterstock_175137287-300x200According to BrokerCheck records Michael Spolar (Spolar), now associated with International Assets Advisory, LLC (IAA), has been sanctioned by The Financial Industry Regulatory Authority (FINRA) over allegations that Spolar exercised discretion in customers’ accounts that were non-discretionary accounts.  Since according to FINRA Spolar did not obtain written authorization from these customers to exercise discretion in their accounts and his member firms did not approve these accounts for discretionary trading, these trades were unauthorized.  FINRA found that while Spolar stated that he discussed strategy with these clients and he received verbal authority for the trades.  However, when the firm discovered the activity Spolar was terminated. FINRA also found that when Spolar moved to a different brokerage firm he continued to exercise discretion in customer accounts despite his prior termination for the same conduct.

In addition to the FINRA sanctions Spolar has been subject to eight customer complaints, one termination, and one financial disclosures including a bankruptcy filing in December 2015.  Some of the complaints against Brodt allege securities law violations including that the broker engaged in unauthorized trading among other claims.

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shutterstock_172034843-300x200Broker Clay Hoffman (Hoffman) was recently sanctioned by The Financial Industry Regulatory Authority (FINRA) in an enforcement action that led to a permanent bar against the broker.  According to BrokerCheck, FINRA found that Hoffman consented to sanctions that he executed discretionary transactions in a customer’s account without prior written authorization from the customer to exercise discretionary trading or approval by his brokerage firm.

The securities lawyers of Gana LLP are also investigating customer complaints against Hoffman.  There have been at least 14 customer complaints against Hoffman, four regulatory actions, and one employment termination for cause in Hoffman’s 14 year career.  The customer complaints against Hoffman allege a number of securities law violations including that the broker made unauthorized trading, fraud, and breach of fiduciary duty among other claims.

The most recent customer complaint was filed in April 2015 and alleges unsuitable investments, unauthorized trading, and misrepresentations causing $234,697 in damages.  The claim was settled.

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shutterstock_170949320-300x199Gana LLP’s investment fraud attorneys are looking into multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Rodger James Burskey (Burskey) that led to a regulatory action by FINRA. According to Burskey’s FINRA BrokerCheck records, there are several disclosures on his record pertaining to unauthorized, unsuitable, and excessive trading. Burskey has dealt with an employment separation and was barred by FINRA from the securities industry. In December 2016, Burskey was barred by FINRA from having any registration capacities in the securities industry. He consented to the sanctions and findings of FINRA and refused to appear on the record regarding allegations of making unsuitable recommendations and engage in discretionary trading.

Burskey entered the securities industry in 1985 and was last employed at Voya Financial Advisors, Inc. until November 2015. He was previously registered at:

• US Allianz Securities, Inc. (February 1999 – November 2006)

shutterstock_132704474-300x200Gana LLP’s investment fraud attorneys are investigating multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) again broker Todd Douglas Ryman (Ryman). According to Ryman’s FINRA BrokerCheck records, there are several disclosures on his record pertaining to unauthorized trading, unsuitable trading, misrepresentation of material facts, amongst other allegations.

Ryman entered the securities industry in 1995 and currently employed at Suntrust Investment Services, Inc. since February 2017. He was previously employed at:

• Raymond James & Associates, Inc. (September 2016 – February 2017)
• Deutsche Bank Securities, Inc. (May 2011 – September 2016)
• Merrill Lynch, Pierce, Fenner & Smith Inc. (October 2009 – May 2011)
• Banc of America Investment Services, Inc. (October 2002 – October 2009)
• UBS Painewebber, Inc. (July 1998 – October 2002)
• Josephthal & Co., Inc. (February 1996 – July 1998)
• Bear, Stearns & Co., Inc. (August 1995 – February 1996)

In February 2017, a customer complaint was filed for alleged documentation during the period of September 2016 to February 2017 while Ryman was employed at Raymond James and Associates. The stated alleged damages are $300,000.00 and the claim is currently pending. Another pending case was filed in November 2016 by a customer alleging that Ryman sold an unsuitable Private Equity fund. The alleged damages were $250,000.00 and is still pending.

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shutterstock_94127350-300x205Our firm is investigating claims made by regulators and brokerage firms including LPL Financial LLC (LPL Financial) concerning broker Paul Dorion (Dorion).  Dorion is currently not associated with any brokerage firm due to his bar by The Financial Industry Regulatory Authority’s (FINRA) in October 2016 for failing to response to the regulator’s request for information.

FINRA’s investigation likely revolves around the disclosures concerning Dorion’s termination from LPL Financial in October 2015.  At that time Dorion was terminated for cause alleging that the broker engaged in unauthorized trading, violation of firm’s document signature policy, and concerns regarding concentrated equity positions in client accounts.  Doriaon was also alleged to have failed to respond to inquiries from the firm’s compliance department.  Subsequently, in October 2016 a customer filed a complaint alleging that Dorion had excessively traded her account which contained funds from a home mortgage.  The complaint is currently pending.  Dorion also has several tax liens dating from 2010 through 2015.

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shutterstock_175298066-300x225Our securities fraud attorneys are investigating customer complaints and a recent regulatory action filed with The Financial Industry Regulatory Authority (FINRA) against Paul Alexander (Alexander) formerly associated with Raymond James & Associates, Inc. (Raymond James), alleging Alexander engaged in a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, breach of fiduciary duty, and securities fraud among other claims.

In November 2016 FINRA sanctioned Alexander after he consented to the entry of findings that in contravention of his member firm’s policies and procedures, Alexander effected transactions while exercising discretion without prior written authorization in customer accounts and without notifying his brokerage firm to accept the accounts as discretionary.

The most recent customer complaint filed against Alexander was in September 2015 alleging unauthorized trading causing $244,000 in damages.  The claim was settled for $95,000.

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shutterstock_155045255The securities lawyers of Gana LLP are investigating a customer complaint filed with The Financial Industry Regulatory Authority (FINRA) against broker Charles Laubach (Laubach).  According to BrokerCheck records Laubach has been subject to at least four customer complaints and two employment separations for cause.  The customer complaints against Laubach alleges securities law violations that including unauthorized trading among other claims.

In February 2015, Laubach was terminated by Ameriprise Financial Services, Inc. (Ameriprise) on allegations that Laubach violated company policies by soliciting certain equity securities and mismarking trade tickets.  In March 2016 Laubach was terminated by Chapin Davis Investments (Chapin Davis) for mis-marking transactions tickets and failure to follow written supervisory procedures.

Brokers have a responsibility 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.  Advisors are also not allowed to engage in unauthorized trading.  Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b).  These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

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shutterstock_27786601The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Larry Wolfe (Wolfe). According to BrokerCheck records, Reda has been subject to nine disclosures including eight customer complaints and one employment termination for cause. The customer complaints against Wolfe allege a number of securities law violations including that the broker made unsuitable investments, fraud, unauthorized trading, and omissions of material information among other claims.

In December 2015, brokerage firm Herbert J. Sims & Co. Inc. (Herbert J. Sims) terminated Wolfe for cause alleging that the broker exercised discretion, in a non-discretionary account, in making trades for an account without speaking with client before trades in violation of firm policies among other causes for the broker’s termination.

The most recent customer complaint was filed In May 2016 claims $1,500,000 in damages and alleges seriously-egregious broker and broker/dealer misconduct upon the client including unauthorized trading, unsuitable investment recommendations, fraudulent misrepresentations and omissions of material information, violation H.J Sims policies and procedures.

Brokers have a responsibility 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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