Articles Posted in Unauthorized Trading

shutterstock_92699377-300x285The investment fraud attorneys at Gana Weinstein LLP have been investigating previously registered broker Sanders Spangler (Spangler). According to BrokerCheck Records kept by the Financial Industry Regulative Authority (FINRA), In February 2017, LPL Financial LLC (LPL Financial) terminated Spangler for executing unauthorized trades in non-discretionary customer accounts. Shortly after, in March 2018, FINRA barred Spangler from financial industry due to Spangler’s failure to appear to an on-the-record testimony regarding the unauthorized trade allegations against Spangler at LPL Financial. By failing to appear to the testimony, Spangler was in violation of FINRA Rules 8210 and 2010. Without admitting or denying the findings, Spangler consented to the sanction and to the entry of findings. However, the extent of which Spangler executed unauthorized trades is still unclear.

Spangler has also been subject to six customer disputes within the past two years.  Two of these disputes are still pending.

In March 2018, Spangler’s ex-wife alleged that Spangler was forging her account documents. This dispute is currently still pending.

In October 2017, a customer alleged that Spangler was over-concentrating the customer’s investments in risky energy stocks. In addition, the customer alleged that Spangler has liquidated the account without permission from the customer. This dispute is currently still pending.

In June 2017, a customer alleged that Spangler instigated unsuitable, unauthorized trades in a non-discretionary customer account without the customer’s knowledge or permission. The case settled for $225,000. Continue Reading

shutterstock_188874428-300x200Investment fraud attorneys at Gana Weinstein LLP have been investigating previously registered broker Charles Dixon (Dixon). According to BrokerCheck Records kept by The Financial Industry Regulatory Authority (FINRA), in January 2018, Dixon was barred from the financial industry for failing to appear at an on-the-record testimony concerning allegations that he was exercising discretion without prior written authorization.  According to FINRA, Dixon consented to the sanction and bar due to the fact that he refused to appear to the testimony.   At this time it is unclear the extent and nature of the unauthorized trading that occurred.

FINRA’s investigation was in connection with Dixon’s termination from Morgan Stanley. In March 2017, Dixon’s employer, Morgan Stanley, terminated Dixon due to a customer allegation that Dixon was exercising discretionary power in a customer’s non-discretionary account without prior customer written approval.

In addition, Dixon has been subject to two customer disputes concerning unauthorized trading and churning. In October 2016, a customer alleged that from June 2013 to July 2016, Dixon was executing unauthorized trades in the customer account. This dispute settled for $225,000.  Continue Reading

shutterstock_175993865-300x225Securities attorneys at Gana Weinstein LLP have been investigating previously registered broker Shaun Hayes (Hayes). According to BrokerCheck Records, Hayes has been subject to seven customer disputes in the past year, four of which are still pending. The majority of these disputes allege unauthorized trading of customer accounts.

In December 2017, a customer alleged that from May 2013 to December 2017, Hayes was executing unauthorized trades in the customer’s accounts. This dispute  is currently still pending.

In December 2017, another customer alleged that Hayes was engaging in unauthorized trades in the customer account and is requesting $139,000 in damages. This complaint is still pending.

In December 2017, a customer alleged that Hayes was instigating unauthorized trades in the customer account. This case settled for $125,000. Continue Reading

shutterstock_184433255-300x228The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Charles Lundell (Lundell).   According to BrokerCheck records, Lundell was suspended by FINRA in November 2017 for executing unauthorized trades in customers’ non-discretionary accounts. In addition, Lundell has been subject to two customer disputes, a regulatory action sanctioned by the New York Stock Exchange (NYSE), and two discharges from member firms.

In November 2017, FINRA found that Lundell violated the NASD Conduct Rule 2510(b) and FINRA Rule 2010 by executing unauthorized transactions in five of his customers’ non-discretionary accounts. From January to February 2017, Lundell exercised discretion of $252,912 of four equity securities in his customers’ accounts and sold $65,788 of one of the equity securities without customer or firm approval. FINRA fined Lundell $5,000 and suspended him for 30 days.

In addition, in March 2017, Lundell was discharged from First Allied Securities, Inc. for violating the firm policy regarding the execution of unauthorized transactions without the firm’s required approval.

Lundell has also been subject to multiple customer complaints. In October 2017, a customer alleged that Lundell had breached contract, committed negligence, and breached fiduciary duty which resulted in an alleged $100,000 in losses to the customer. The case was settled at $90,513. Continue Reading

shutterstock_164634200-300x200Securities attorneys at Gana Weinstein LLP are currently investigating previously registered broker Guistino Destefano (Destefano). According to BrokerCheck Records, Destefano has been subject to two terminations from employment and one regulatory action in which the Financial Industry Regulatory Authority (FINRA) sanctioned Destefano for various violations of the securities laws. In addition,  Destefano has been subject to 6 customer disputes concerning unauthorized trades and unsuitable investments, one of which is still pending.

In May 2014, Destefano resigned from Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) due to customer allegations of unauthorized trading and recommending securities to customers that weren’t approved by the firm. Subsequently, in March 2016, FINRA found that between July 2013 and May 2014, Destefano had executed unauthorized trades in 4 non-discretionary customer accounts. In addition, Destefano also had marked over 100 order tickets incorrectly, labeling them “unsolicited” when they were in fact solicited trades. For executing unauthorized trades, Destefano was found to be in violation of unauthorized NASD Conduct Rule 2510(b) and FINRA Rule 2010. Destefano consented to the sanctions and to the entry of findings and FINRA suspended Destefano for 3 months and imposed a fine of $10,000.

In addition, Destefano has been subject to multiple customer complaints. In September 2017, a customer alleged that Destefano exercised discretion in non-discretionary customer accounts, over-concentrated investments, and placed customers in unsuitable investments. The customer has requested $830,000 in damages. This dispute is currently still pending.

In March 2017, a customer alleged that from September 2010 to August 2014, Destefano placed the customer in unsuitable investments.   Continue Reading

shutterstock_120556300-300x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), in January 2018, advisor Larry Boggs (Boggs) was barred indefinitely from the financial industry by FINRA concerning allegations that he engaged in unsuitable investments, excessive trading and unauthorized transactions. According to FINRA, Boggs exercised discretion in customer accounts without written approval from customers or the firm. Boggs would also allegedly falsely state the investment objectives and risk tolerance of customers in the firm’s books so that customers would conform to his high-frequency trading strategy.

FINRA found that in June 2010, Boggs updated the risk tolerance in 4 investment portfolios from Moderate to Moderate/Aggressive, and changed 2 investment portfolio objectives to Aggressive.  FINRA determined that the high-frequency trading strategy was unsuitable to his customer’s needs and did not match the customer’s investment portfolio objectives. By changing Ameriprise’s books and records, Boggs violated FINRA Rules 4511 and 2010.

In addition, in May 2015, Boggs’ employer, Ameriprise Financial Services, Inc. (Ameriprise Financial) discharged Boggs alleging that Boggs violated the company’s discretionary trading and suitability policies.

In January 2016, Boggs filed for bankruptcy and was also discharged. Bankruptcies are a potential sign that the advisor has difficulty managing their own finances.  FINRA provides this information to the public because it is material for consumers to know whether or not their advisor’s financial situation influences the advisor’s recommendations. Continue Reading

shutterstock_175835072-300x199The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Michael Resciniti (Resciniti). According to BrokerCheck records, Resciniti was suspended by FINRA in December 2017 for seven months.  In addition, Resciniti has been subject to five customer disputes and three regulatory orders. Three of the customer disputes are still pending.  Many of the claims allege churning and unauthorized trading.

In November 2017, FINRA found that Resciniti executed 31 unauthorized transactions in two of his customer’s accounts. The duration of his suspension is 7 months.

In addition, in February 2016, Resciniti resolved a bankruptcy filing and has a tax lien of over $115,000.  Bankruptcies and large tax liens are a potential sign that the advisor has difficulty managing their own finances.  FINRA provides this information to the public because it is material for consumers to know whether or not their advisor’s financial situation influences the advisor’s recommendations.

In November 2017, customers alleged that from August 2016 to November 2017, Resciniti engaged in churning of accounts, unsuitable recommendations, and breach of fiduciary duty. The customer has requested damages of $184,241. This dispute is still pending.

In March 2015, a customer alleged that Resciniti engaged in excessive use of margin. The customer has requested damages of $5,300. This dispute is still pending. Continue Reading

shutterstock_190371500-300x200The securities lawyers at Gana Weinstein LLP are investigating complaints against broker Alexander Kibrik (Kibrik). According to BrokerCheck records, Kibrik currently has two pending customer complaints.

In March 2017, a customer alleged unauthorized trading and unsuitability. The customer is requesting $413,045 in this pending dispute.

In July 2015, a customer alleged breach of fiduciary duty, negligence, and breach of contract. The customer is requesting $21,125,000 in this pending dispute.

Advisors are not allowed to engage in unauthorized trading. Unauthorized trading occurs when a broker sells securities without the prior consent from the investor. All brokers, who do not have discretionary authority to trade an account, are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). Further, subsequent disclosure of the trades does not cure the violation. Unauthorized trading is a type of investment fraud because the SEC has found that no disclosure could be more important and material to an investor than to be made aware that trading is taking place. Unauthorized trading is often a gateway violation to other securities violations including churning, unsuitable investments, and excessive use of margin.

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shutterstock_175993865-300x225According to BrokerCheck records kept by the Financial Industry Regulatory Authority (FINRA), broker Clifford Vatter (Vatter) has received six customer complaints. Furthermore, Vatter was terminated in July 2017 from Raymond James & Associates for allegedly engaging in unauthorized trading in one customer’s account.

In September 2016, a customer alleged Vatter made unsuitable investment recommendations, misrepresented and omitted material facts and breached his fiduciary duty. This dispute settled for $250,000.

In April 2009, a customer alleged Vatter made unauthorized withdrawals among other allegations. This dispute settled for $13,300.

In April 2001, a customer alleged Vatter misrepresented material facts and made unsuitable recommendations. This dispute settled for $250,000.

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shutterstock_26269225-300x200According to BrokerCheck records financial advisor Coleman Devlin (Devlin), formerly associated with IFS Securities (IFS), has been subject to 14 customer complaints.  In addition, Devlin has been subject to two regulatory matters and has been terminated by two firms for cause.  In June 2016 Devlin was discharged from Stifel, Nicolaus & Company, Incorporated (Stifel, Nicolaus) on allegations of unauthorized trading.  Thereafter, The Financial Industry Regulatory Authority (FINRA) conducted its own investigation of Devlin’s trading activities.

In October 2017, FINRA found that Devlin effected discretionary trades in five customer accounts without obtaining prior written authorization from the customers and without acceptance of the accounts as discretionary by his member firm.

Devlin has also been subject to numerous customer complaints over the course of his career.  The most recent case was filed in November 2017 and alleged unsuitable investments.  The customer seeks $600,000 in damages and the claim is currently pending.

In May 2017 another customer filed a complaint alleging that Devlin made unsuitable and unauthorized investments from September 2013 through June 2016.  The claim was settled for $95,000.

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