Securities Lawyers Blog

How to Find An FINRA Securities Attorney to Assist in Your Investment/Broker Case

December 10, 2013 | by Staff Attorney

You’ve gone over your account statements and start to suspect that your broker hasn’t invested your assets appropriately. What should you do? The first step is to compile all of your documents and correspondence with your broker. You should collect your monthly account statements, opening account documents, and any written communication with your brokerage firm for starters. This will make it easier to assess your case.

Next, you should consult with an attorney. While not required, when you have securities claim, brokerage firms rarely settle claims with individuals without the assistance of an attorney. Most securities claims must be brought in arbitration before the Financial Industry Regulatory Authority (FINRA), the broker-dealer regulator. A securities attorney can represent you during the arbitration or mediation proceedings and provide direction and advice on how to present your claim. Even if you do not choose to hire an attorney, brokerage firms usually hire counsel to represent them. If you cannot afford an attorney, many law firms offer contingency fee arrangements.

The SEC provides the following advice on finding an attorney who specializes in resolving securities complaints. If you need help in finding a lawyer who specializes in resolving securities complaints, you may want to try the following:

UBS Puerto Rico Bond Fund Sales Practices Come Under Fire

December 8, 2013 | by Staff Attorney

UBS Puerto Rico operates 23 proprietary non-exchange-traded closed-end funds (UBS Funds). UBS is one of the key players in the Puerto Rico municipal debt market and has packaged and sold approximately $10 billion in municipal debt through the UBS Funds.

It has been alleged that UBS marketed the UBS Funds to customers as income producing municipal bond funds that were designed to preserve investor principal. Over a number of years, UBS allegedly had its advisors over-concentrate thousands of its Puerto Rican clients in the UBS Funds. However, at the same time that UBS recommended the UBS Funds to clients, UBS allegedly liquidated its own UBS Fund assets due to the firm’s internal analysis that found that the Funds contained excessive risks.

Over the summer of 2013, the market for Puerto Rico’s $70 billion municipal debt began to evaporate. As the value of the UBS Funds has plummeted by 50-60% in value in a matter of months investor complaints filed with the Financial Industry Regulatory Authority Inc. (FINRA) have increased.

Adam Gana of Gana LLP is Quoted in a Reuters Article About FINRA Arbitrator Pay

December 6, 2013 | by Staff Attorney

Reuters: Arbitrators could receive pay hike under wall street watchdog plan, By Suzanne Barlyn (December 6, 2013)

http://www.reuters.com/article/2013/12/06/finra-arbitrators-idUSL2N0JL16120131206

Source Capital Group Employees Sanctioned Over Blue Ridge and Argyle Oil and Gas Private Placements

December 6, 2013 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) recently sanctioned Source Capital Group (Source Capital) registered representatives Kevin Cline (Cline), Robert Burr (Burr), Vincent Christopher (Christopher), and Thomas Gilleland (Gilleland). FINRA’s findings concerned allegations that the brokers failed to adequately disclose material facts and made sales through misstatements in oil and gas partnership interests in Blue Ridge Securities (Blue Ridge) and Argyle Securities. (Argyle).

According to FINRA, from at least October 11, 2006, and December 17, 2012, the named brokers violated the federal securities laws and FINRA rules in connection with selling Blue Ridge and Argyle offerings. Cline is the branch office manager for Source Capital’s Bowling Green, Kentucky branch office on Adams Street and Burr managed the Wright Street office where Christopher and Gilleland were brokers. Source Capital’s Adam Street branch office was the sole seller of private placement offerings of oil and gas securities issued by Blue Ridge’s limited partnerships all of which were managed by Blue Ridge Group, Inc. Source Capital’s Wright Street branch office was the sole seller of private offerings of Argyle limited partnerships managed by Argyle Energy, Inc. Blue Ridge and Argyle were both housed at the Adams Street branch office and were owned by Robert “Bob” Burr, the father of Burr as the controlling stockholder and former officer of both Blue Ridge and Argyle.

FINRA alleged that Cline failed to adequately disclose material information in selling Blue Ridge to investors. Specifically, FINRA found that Blue Ridge gave money to Cline that Cline used to pay Source Capital representatives a $2,000 monthly salary in advance of their draws which were not always repaid. FINRA concluded that the failure to adequately disclose that Cline used Blue Ridge funds to pay compensation to Source representatives was a material omission in violation of FINRA Rule 2010 and NASD Rule 2110, and Section 17(a)(2) of the Securities Act of 1 933, 15 U.S.C. § 77q(a)(2).

Former Ryan Beck and Oppenheimer Financial Advisor William Bucci Barred From the Financial Industry

December 5, 2013 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) recently barred financial advisor William D. Bucci (Bucci) for allegedly accepting 19 personal loans totaling $635,000 from nine customers in violation of FINRA rules. Bucci also allegedly willfully failed to amend his Form U4 to disclose material facts relating to two judgments that were entered against him. In addition, customers have filed complaints alleging that Bucci sold illegal promissory notes.

Bucci has been licensed as registered securities representative since 1983. From April 27, 2002, until April 2007, Bucci was a registered representative with Ryan Beck & Co. (Ryan Beck). Thereafter, and until August 2011, Bucci was registered with Oppenheimer & Co. (Oppenheimer). Finally, from August 2011, until May 2012, Bucci was registered with Financial Network Investment Corp. (Financial Network). Bucci’s public disclosures list that he is involved in a number of companies and other business activities including Delaware Valley Financial Group, LLC, DVFG Advisors, LLC, Chestnut Hill College Board of Trustees, Gennaro Vuono & William Bucci, 3010 Ocean Ave, LLC, 510 Seacliff LLC, 210 Sea Spay LLC, and 216 Sea Spay LLC.

FINRA alleged that between May 2004 and December 2010, Bucci accepted 19 personal loans from nine brokerage customers totaling $635,000. FINRA found that all of the personal loans paid annual interest of at least 10 percent and had terms of up to five years. In one instance, Bucci was accused of borrowing $425,000 in ten loan transactions from an elderly retired couple who were customers of Bucci at Ryan Beck and Oppenheimer. FINRA alleged that none of the elderly couple’s loans have been repaid. Further, according to FINRA, the elderly couple loaned Bucci a portion of the $425,000 by withdrawing money from their brokerage accounts and securing a second mortgage on their home. FINRA found that Bucci’s conduct violated NASD Rules 2370 and 2110 and FINRA Rules 3240 and 2010.

Former LPL Financial Broker Stephen Brown Accused of Selling Private Real Estate Investments

December 3, 2013 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) recently barred broker Stephen Michael Brown (Brown) for failing to comply with FINRA’s requests for information concerning allegations that Brown engaged in the unlawful sale of securities. Specifically, at least two customers had brought complaints against Brown alleging that Brown had solicited them to invest in private real estate investments in violation of industry rules.

Brown was formerly registered with FINRA firm LPL Financial Corporation (LPL Financial) from 1989 through May 2009. Thereafter, Brown became associated with Brewer Financial Services, LLC until November 2010. Finally, from November 2010, until May 2011, Brown was an associated person of Best Direct Securities, LLC (Best Direct) a currently inactive FINRA firm. Brown’s public disclosures list Brown as the owner of Steve Brown Ent., a company engaged in real estate business.

The accusations made against Brown are consistent with a “selling away” securities violation. Brokers are required to have their firms approve all securities transactions they participate in, even private financial transactions. Thus, when a broker fails to notify the firm of securities activities he or she “sells away” from the firm. Selling away is prohibited under FINRA Rule 3040, as well as other securities laws. The most common securities products solicited in selling away schemes are private placements and promissory note.

SEC Finds That Former JP Turner Broker Dimitrios Koutsoubos Engaged In Churning

December 2, 2013 | by Staff Attorney

The Securities and Exchange Commission (SEC) recently found that broker Dimitrios Koutsoubos (Koutsoubos) churned the brokerage account of Teddy Bryant (Bryant). The SEC’s decision ordered Koutsoubos to: (1) cease and desist from committing fraud; (2) be barred from association with a broker, dealer, investment adviser, (3) disgorge $30,000 plus prejudgment interest, and (4) pay civil penalties of $130,000.

The SEC allegations against Koutsoubos also involved several other J.P. Turner & Company, LLC (JP Turner) registered representatives including Michael Bresner (Bresner), Ralph Calabro (Calabro), and James Konner (Konner). The SEC alleged that Calabro, Konner, and Koutsoubos between January 1, 2008, and December 31, 2009, churned the accounts of seven customers by engaging in excessive trading for their own gains in disregard of their clients’ investment objectives and risk tolerances. The SEC claimed that Calabro, Konner, and Koutsoubos generated fees and commissions totaling around $845,000, for their benefit while the clients suffered aggregate losses of approximately $2,700,000.

JP Turner is a registered broker-dealer headquartered in Atlanta, Georgia, with two majority owners. From 2008 to 2009, JP Turner had approximately 200 small or one-person branch offices. Koutsoubos joined JP Turner in 2000 and left in 2009. Thereafter, Koutsoubos became employed with Caldwell International Securities Corporation.

Senator Warren proposes 21st Century Glass-Steagall Act

November 27, 2013 | by Staff Attorney

On November 12, 2013, Senator Elizabeth Warren warned that the “too big to fail” problem has only worsened since the 2008 financial crisis. JP Morgan Chase & Co., Bank of America Corp., Citigroup Inc., and Well Fargo & Co. each hold more than half of the total banking assets in the country. As large concentrations of wealth reside with a small number of banks, the possibility of another financial crisis looms unless certain reforms are implemented.

While the big banks become more concentrated and more complex, the Dodd-Frank Act’s implementation struggles. The agencies implementing the Dodd-Frank Act have missed more than 60% of the deadlines even though regulators continue to meet with various banks. Not only are regulators dragging their feet, but also the House recently passed two bills to delay provisions of the Dodd-Frank Acts. The Retail Investor Protection Act (RIPA) prevents the Department of Labor from defining circumstances under which an individual is considered a fiduciary. The Swaps Regulatory Improvement Act (SRIA) amends the swaps push-out requirement. The two bills passed by the House compound the delays of the regulatory implementation.

Although the House continues to hinder the Dodd-Frank Act, Senator Warren believes Congress needs to step in order to prevent another financial crisis. Senator Warren along with Senators John McCain, Maria Cantwell and Angus King urges the passage of the “21^st Century Glass-Steagall Act.” As Senator Warren stated, the new Glass-Steagall Act, “would reduce failures of the big banks by making banking boring, protecting deposits, and providing stability to the system even in bad times.”

Coker & Palmer Broker Sanctioned Over Allegations of Failure to Conduct Due Diligence on Private Placement Offering

November 26, 2013 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) recently sanctioned broker Michael A. Barina (Barina) over allegations that Barina failed to conduct reasonable due diligence into the offering a private placement security. In addition, FINRA alleged that the broker commingled certain funds.

Barina first became registered with FINRA in 1999. Barina was registered from November 13, 2009, through November 14, 2011, with Coker & Palmer, Inc. (Coker & Palmer). In November 2011, Barina became registered with Aegis Capital Corp. until May 2013. Thereafter, Barina was registered with Merrimac Corporate Securities, Inc. until October 2013.

Brokerage firms and brokers are responsible for conducting due diligence on all securities recommended by a broker. The due diligence requirement is heightened where the investment recommendation is a private placement offering or other type of non-public offering where there is no public information available and brokerage firm is acting as the underwriter of the securities.

Wells Fargo Sanctioned by FINRA Over Allegations of Supervisory Failures

November 25, 2013 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) recently sanctioned Wells Fargo Advisors, LLC (Wells Fargo) and imposed a $150,000 fine over allegations that the firm failed to establish, maintain and enforce a supervisory system that was reasonably designed to adequately review and monitor the transmittal of funds from the accounts of customers to third party accounts in violation of NASD Rules 3010, 3012(a)(2)(B)(i) and FINRA Rule 2010.

Wells Fargo is a FINRA member and a full service broker-dealer with its principal offices located in St. Louis, Missouri. Wells Fargo employs over 20,000 registered individuals and maintains over 7,000 registered locations.

Under FINRA Rule 3010, a brokerage firm owes a duty to properly monitor and supervise its employees. The rule states that “[e]ach member shall establish and maintain a system to supervise the activities of each registered representative…that is reasonably designed to achieve compliance with applicable securities laws and regulations…”