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shutterstock_184149845-300x246The securities lawyers of Gana LLP are following the case against broker Jeffrey Kluge (Kluge) who pleaded guilty to two counts of bank fraud in the state of Minnesota. A plead agreement was filed with the U.S. District Court in Minnesota on March 29, 2017. Kluge entered the securities industry in 1991 and remained with Merrill Lynch, Pierce, Fenner & Smith Inc. for the entirety of his career. Kluge started a scheme to create fraudulent Merrill Lynch account statements to falsely secure collateral for multi-million lines of credit. Kluge was able to carry out this scheme by creating a fake domain name,, and fake email address,, to send the falsified account statements to Platinum Bank. A false Merrill Lynch identity was used as a cover for the email address. Kluge ran this fraudulent scheme for 15 years, starting in 2001 to November 2016.

In 2001, Kluge received a line of credit for $150,000 from Alliance Bank by putting up municipal bond funds as collateral. These bond funds were substantiated by falsified account statements that hid the fact that the same bonds were already pledged to Merrill Lynch loans previously obtained by Kluge. The outstanding balance of Alliance Bank line of credit was at $6 million in November 2016.

Utilizing the same scheme for Alliance Bank, Kluge was able to secure a $1 million line of credit from Platinum Bank in Minnesota. He procured this line of credit by putting up the same assets used for Merrill Lynch and Alliance Bank.  The Platinum Bank line of credit balance was at $2.7 million as of November 2016.

shutterstock_95416924-300x225The securities lawyers of Gana LLP are investigating customer complaints filed with Financial Industry Regulatory Authority (FINRA) against broker Tracy Rae Turner (Turner). According to BrokerCheck records, Turner has been subject to at least 31 customer complaints, two employment separations for cause, one regulatory, and one financial among other claims during his 22 years of experience. The customer complaints against Turner alleges securities law violations that including unauthorized trading, fraud, breach of contract, negligence, and failure to supervise among other claims.

In a FINRA regulatory action against Turner in November 2016, the agency alleged that he offered and sold interests to investors totaling approximately $4.1 million without giving prior notice to and receiving prior written permission from his member firm. For successfully soliciting these investments, Turner received approximately $270,000 in compensation. A decision was rendered in April 2017 which resulted in barring Turner from FINRA association and fining him for $272, 879.04. The findings of the decision also alleged that Turner created a publically available offering memorandum to market sales of interest in private securities without providing a sound evaluation of investments and included false and misleading statements.

In June 2009, Turner was permitted to resign from his position at CapWest Securities, Inc. for conducting sales in states where he was not registered.

shutterstock_183201167-300x198The investment attorneys of Gana LLP are interested in speaking with clients of broker Parks Heard Brown Jr. (Brown). According to his BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA), Brown has been the subject of at least four customer complaints. The customer complaints against Brown allege securities law violations that claim unsuitable investments, churning, unauthorized trading, breach of fiduciary duty, and negligence among other claims.

The most recent complaint was filed in October 2016, alleging that the broker while employed at VSR Financial Services Inc. made unsuitable investments based on the client’s liquidity needs. In March 2014, FINRA found that Brown violated FINRA rules 2090 and 2111 that require the use of reasonable diligence when recommending investment strategies. In addition, a customer alleged an unsuitable series of investments made in account between June 2012 and January 2014 resulting in damages of $245,750.00. The case settled for $71,500.00.

In another case filed in March 2004 a customer alleged that in June 2003 Brown misrepresented and failed to inform the account activity that caused $7,000.00

shutterstock_188269637-300x200Gana LLP’s securities fraud investigation has uncovered a complaint filed by the Financial Industry Regulatory Authority (FINRA) against broker Gerald O’Halloran (O’Halloran). O’Halloran was  formerly associated with Kovack Securities Inc. The complaint alleges that O’Halloran has been the subject of at least eight customer complaints, two employment separations for cause, and one criminal charge. The customer complaints against O’Halloran is a makeup of allegations of numerous securities law violations, including that O’Halloran engaged in unauthorized trades, misrepresentation, breach of fiduciary duty & breach of contract among other claims.

The most recent complaint against O’Halloran was filed in August 2016, alleging $135,000.00 in damage stemming from violation of trading negligently, misrepresentation, omission of a material fact, breach of fiduciary duty & breach of contract in customer’s account while employed at Credit Suisse Securities. The claim is currently pending.

In 2011 a customer filed a complaint alleging unauthorized trades in the account during February 2011 claiming $14,000.00 in damages. The case was resolved with the customer receiving $27,000.00.

shutterstock_27597505Our firm’s investment attorneys are investigating reports in a New York Times article and customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Walter Marino (Marino) currently associated with Benjamin Securities, Inc. (Benjamin Securities) alleging unsuitable recommendations to invest in variable products such as variable annuities and equity indexed annuities.  According to brokercheck records Marino has been subject to seven customer complaints and three employment separations for cause.

According to the New York Times, Marino solicited teachers to invest in high cost low quality annuities with their retirement savings.  The Legend Group was alleged to be the provider of the investments all these teachers held.  The firm fired Marino on grounds other than the investment fee issue. According to Marino’s brokercheck records the cause of the separation was that Marino represented to the firm that an annuity investment was not a replacement when in fact the firm determined it was.  Legend has stated that their investments and charges “were consistent with the firm’s policies.”

Variable annuities and equity indexed annuities are complex financial and insurance products.  In fact, recently the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing.  Essentially, a variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you.  The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen.  The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

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imgresIn the short term, a Donald Trump presidency might help markets. That’s right, all the cataclysmic talk of the markets immediately seizing are likely inaccurate. However, in the long term, the United States may have some serious fiscal issues. First, Donald Trump the new rule from the Department of Labor requiring brokerage firms to act in the best interests of their clients in 401(k) plans will likely be repealed.

Barbara Roper, the director of investor protection at the Consumer Federation of America says, Republicans “have made it clear that rolling back those protections will be on the agenda of a Republican administration.”

Second, President-elect Trump has pledged to reduce taxes exponentially across the board. Currently, the tax rate for married couples filing jointly is seven separate tax brackets with the highest being 39.6% for all income earned over $466,951. Trump proposes a 3 tax brackets with the highest being 33% for all income earned over $225,000. Trump has also proposed eliminating the estate tax, which currently taxes 40% on all money inherited over $5.45 million and reducing business taxes from 35% to 15%. Forty-seven percent of these tax cuts will go to the richest 1% according to Forbes.

shutterstock_186772637In September 2015, The Securities and Exchange Commission (SEC) announced fraud charges and an asset freeze to halt an ongoing real estate investment scheme being conducted by a trio of business associates in California accused of stealing investors’ money.  The SEC alleged in their complaint that the fraud was orchestrated by Paul Ricky Mata (Mata), a former registered investment adviser with an extensive disciplinary history.  Even though Mata was terminated from Ameriprise Financial Services, Inc. (Ameriprise) and had other disciplinary suspensions, Mata formed two unregistered advisory firms, Logos Wealth Advisors, Inc. (Wealth Advisors) and Lifetime Enterprises, Inc., dba Logos Lifetime University (Lifetime University).  According to the SEC, Mata together with David Kayatta (Kayatta) and Mario Pincheira (Pincheira) defrauded investors.

The complaint alleges that from 2008 through the 2015, defendants raised over $14 million from over 100 investors from California and several other states, by soliciting investments in Secured Capital Investments, LLC (SCI) and Logos Real Estate Holdings, LLC (LREH).  Many of the investors were claimed to be retirees who were duped into selling their existing securities holdings and investing in the fraudulent funds using online videos, investment seminars promising “Indestructible Wealth,” and presentations to church groups promising “Finances God’s Way.” Mata, Kayatta, Wealth Advisors, and Lifetime University have been accused of inducing investors by falsely promising guaranteed returns, misrepresenting investment proceeds use, and failing to disclose Mata’s disciplinary history to his advisory clients.

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GUEST POST By Steven Madel

As you already know, it can get ugly fast during a divorce. Or, on occasion, the married couple holds no animosity toward one another and is ready to split amicably.

Depending on your particular situation, you may consider arbitration, mediation, or hiring divorce attorneys for a typical divorce.

shutterstock_27786601The securities lawyers of Gana LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Bruce Slater (Slater).  According to BrokerCheck records Slater has been subject to at least four customer complaints.  The customer complaints against Slater alleges securities law violations that including unsuitable investments and misrepresentations among other claims.   Many of the complaints involve direct participation products (DPPs) and private placements including oil and gas partnerships – including Ridgewood Energy-, non-traded real estate investment trusts (REITs), variable annuities, and other alternative investments.

Our firm has represented many clients in these types of products.  All of these investments come with high costs and historically have underperformed even safe benchmarks, like U.S. treasury bonds.  For example, products like oil and gas partnerships, REITs, and other alternative investments are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products, if they can be redeemed.  However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them.  Further, investor often fail to understand that they have lost money until many years after agreeing to the investment.  In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

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