Securities Lawyers Blog

Advisor Michael Sandberg Accused of Unsuitable Investment Practices

February 4, 2024 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Michael Sandberg (Sanberg), currently associated with Ameriprise Financial Services, LLC (Ameriprise), has been subject to ten customer complaints and one regulatory action during his career. Several of those complaints against Sandberg allege that Sandberg recommended unsuitable investments in various investments among other allegations of misconduct relating to the handling of their accounts.

In December 2020, a customer complained that Sandberg violated the securities laws by alleging that Sandberg engaged in negligent investment advice, breach of fiduciary duty, breach of contract, and fraud. The claim alleges $100,000 in damages and is currently pending.

Brokers are required under the securities laws to treat their clients fairly. This obligation includes the duties to disclose material risks of the investments they recommend and to present products, particularly complex or confusing products, in a fair and balanced manner that allows the client to evaluate the recommendation. Another important obligation advisors have is to make only suitable recommendations for investments to the client.

Advisor Barbara Shaffer Had Customer Complaints Relating to GPB

February 4, 2024 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), advisor Barbara Shaffer (Shaffer), currently employed at Cambridge Investment Research, Inc. (Cambridge), has been subject to at least four customer complaints during the course of her career. Several of those complaints against Shaffer allege that Shaffer engaged in authorized trading and recommended unsuitable investments, including into the GPB Ponzi scheme among other allegations of misconduct relating to the handling of their accounts. However, three of these complaints have been expunged from Shaffer’s record under FINRA’s notoriously flawed expungement procedures.

In January 2020, a customer complained that Shaffer violated securities laws by alleging that Shaffer engaged in negligent investment advice and breach of fiduciary duty. The claim alleged $100,000 in damages and settled for $45,000.

In another complaint, the customer alleged unsuitability and breach of fiduciary duty against focused on a $100,000 investment in GPB Automotive Fund, L.P. The GPB funds were later accused of being a Ponzi Scheme by many regulators and its executive officers have been indicted by the DOJ.

Advisor Byron Treat Permanently Barred From Industry Over Sale of Church Bonds

January 22, 2024 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Byron Treat (Treat) has been accused by a securities regulator of failing to supervise recommendations of certain illiquid investments. Treat was sanctioned by The Financial Industry Regulatory Authority (FINRA) concerning whether Treat reasonably supervised the sale of certain illiquid investment. According to records kept by The Financial Industry Regulatory Authority (FINRA), Treat was employed by Great Nation Investment Corporation (Great Nation) at the time of the activity. If you have been a victim of Treat’s alleged misconduct, our firm may be able to assist you in recovering funds.

In January 2021, FINRA brought a regulatory action and found that Treat consented to sanctions and findings that he failed to provide documents and information requested by FINRA in connection with an investigation into whether Treat reasonably supervised the sale of certain illiquid investments while at Great Nation.

In February 2021 Great Nation terminated Treat alleging that he failed to supervise the sale of certain church bonds and failed to provide information related to the investigation.

In May 2013, Treat consented to a fine of $5,000 for failing to establish, maintain, and enforce an adequate supervisory system regarding the offering of certain investments at Great Nation.

Eric Felsenfeld Has Alternative Investment Complaints

January 22, 2024 | by Staff Attorney

Broker Eric Felsenfeld (Felsenfeld), currently employed at Ameriprise Financial Services, LLC (Ameriprise) and formerly registered with Kingswood Capital Partners, LLC (Kingswood) has been subject to at least three customer complaint during the course of his career. The complaints alleges that Felsenfeld made unsuitable trading recommendations, and recommending an overconcentration of non-traded Real Estate Investment Trusts (REITs) and Business Development Companies (BDCs) among other potential high risk alternative investments.

According to a BrokerCheck report, in February 2021, a customer alleged that Hancock recommended unsuitable investments in BDCs and REITS. The matter settled for $30,000.

In July 2023 another customer complained of breach of contract, breach of fiduciary duty, negligence and negligent misrepresentation, negligence, and violation of regulation best interest. The complaint alleged $22,000 in damages and settled for $22,000.

Allen Hershberg Barred Over Real Estate Investments – Investor Recovery Options

May 18, 2023 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Allen Hershberg (Hershberg) has been accused by his former employer of engaging in business investment activities including undisclosed outside business activities (OBAs) and private securities transactions. According to records kept by The Financial Industry Regulatory Authority (FINRA), Hershberg was employed by Morgan Stanley Smith Barney, LLC (Morgan Stanley) at the time of the activity. If you have been a victim of Hershberg’s alleged misconduct our firm may be able to assist you in recovering funds.

Hershberg has been subject to regulatory action by FINRA and termination by Morgan Stanley. In July 2022, Morgan Stanley alleged that it had “Concerns Investigation regarding the representative’s unapproved outside real estate investments, as well as concerns regarding the representative’s recommendation of those same outside real estate investments to Firm clients and others, including through limited liability companies the representative created.”

With respect to the FINRA action, the regulator found that Hershberg consented to sanctions and findings that that he failed to provide documents and information requested by FINRA in connection with its investigation into allegations made in a Form U5 filed by his member firm. FINRA found that Morgan Stanley permitted Hershberg to resign due to concerns regarding his unapproved outside real estate investments, as well as concerns regarding his recommendation of those same outside real estate investments to firm clients and others, including through limited liability companies he created.

A review of Hershberg’s disclosed OBAs includes Ian Media Networks Advisor, CPV, LLC, Oak Park, Worthfield 1 LLC, and Dorchester 1 LLC. In addition, Hershberg discloses that he engages in rental property ownership and it appears that some of these entities are related to that business.

Broker Valentino Scott Has Alternative Investment Customer Complaints

May 18, 2023 | by Staff Attorney

Advisor Valentino Scott (Scott), currently employed by brokerage firm Centaurus Financial, Inc. (Centaurus) has been subject to at least 10 disclosures including eight customer complaints, one regulatory action, and one employment termination for cause. According to a BrokerCheck report some of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products and have recovered in excess of $50 million in investor losses.

In July 2022 a customer complained that Scott violated the securities laws by alleging that Scott misrepresented an unsuitable investment. The claim is currently pending and no specific damages are provided.

In March 2022 a customer complained that Scott violated the securities laws by alleging that Scott from October 2013 to the present, Scott made poor recommendations, misrepresented and overconcentrated the customers accounts in unsuitable, illiquid and risky investments. The claim is currently pending and no specific damages are provided.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments. Continue Reading

Advisor Tyler Dean Delahunt barred from industry over unapproved business activity

April 22, 2023 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Tyler Dean Delahunt (“Delahunt”) has been accused by a securities regulator of engaging in unapproved business activities among other allegations. Delahunt was sanctioned by The Financial Industry Regulatory Authority (FINRA) concerning his private securities and undisclosed outside business activity conduct. According to records kept by The Financial Industry Regulatory Authority (FINRA), Reed was employed by Merrill Lynch, Pierce, Fenner & Smith, Inc. (“Merrill Lynch”) at the time of the activity. If you have been a victim of Delahunt’s alleged misconduct our firm may be able to assist you in recovering funds.

In January 2021, FINRA brought a regulatory action and found that Delahunt consented to sanctions and findings that he failed to provide documents and information requested by FINRA in connection with its investigation into Delahunt’s termination. Delahunt’s former firm, Merrill Lynch filed a Form U5 disclosing his termination for alleged misconduct involving the solicitation of clients in an outside investment and participating in financial arrangements with clients. Continue Reading

Advisor John Blakezuniga Has Several Regulatory Actions – Investor Recovery

April 22, 2023 | by Staff Attorney

The investment fraud attorneys at Gana Weinstein LLP have currently been investigating previously registered broker John Blakezuniga (Blakezuniga). According to BrokerCheck Records kept by the Financial Industry Regulatory Authority (FINRA), Blakezuniga, has three regulatory disclosures on his profile.

In 2017, Blakezuniga allegedly violated his firm’s policy when he borrowed $775,000 from two of his firm’s customers and did not repay the full principal amount for either of these loans. According to FINRA, it is generally prohibited for an investment advisor to borrow money from a client unless certain conditions are met, which did not occur here. The purpose of this rule is to avoid serious potential conflicts of interest and risks associated with an investment adviser, who is a fiduciary, borrowing his or her client’s money. Furthermore, Blakezuniga was allegedly untruthful when he completed his firm’s annual compliance questionnaire and answered no to a question that asked if he ever borrowed money from a customer which was false.

Also in 2017, Blakezuniga was fined and suspended for 22 months when he recommended approximately 1,280 transactions in inverse and inverse leveraged exchange traded funds (non-traditional ETFs) in 85 customer accounts without a reasonable basis for the recommendations. In fact, Blakezuniga recommended that his customers hold these non-traditional ETF’s for periods ranging from 30 days to several years despite the fact that these investments were not meant to be held for long periods of time. According to FINRA, an investment adviser is always required to have a reasonable basis for making investment recommendations to clients. This is known as the “suitability” standard, which requires a recommendation based on a client’s idiosyncratic profile such as their individual financial situation, investment objectives, risk tolerance, and other factors.

Securities Arbitration – The Basics: What you need to know.

February 23, 2023 | by Staff Attorney

Securities arbitration is a method of resolving disputes between investors and their brokers or brokerage firms, which is governed by the Financial Industry Regulatory Authority (FINRA). FINRA is a self-regulatory organization that oversees the securities industry and provides a forum for resolving disputes between investors and their brokers or brokerage firms.

Securities arbitration through FINRA is a legal process that allows investors to seek redress for claims arising out of their investment accounts, such as fraud, breach of fiduciary duty, unsuitable investment recommendations, selling away or other misconduct. Securities arbitration is generally faster and less expensive than going to court, and the decision of the arbitrator is final and binding on both parties. It is important for investors to understand their rights and legal options if they believe they have been the victim of misconduct by their broker or brokerage firm.

To initiate a securities arbitration through FINRA, an investor must file a Statement of Claim with FINRA, which sets forth the facts and legal basis for the claim. The Statement of Claim must be filed within six years from the occurrence or event giving rise to the claim. However, the occurrence or event that gives rise to a claim is usually considered the date of damages, or the date a reasonable investor knew or should have known about the claim. While brokerage firms usually argue it is the date of purchase, most arbitration panels disagree with that analysis.

Advisor Anthony Tricario Accused of Churning and Sanctioned By Financial Regulator

January 22, 2023 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Anthony Tricario (Tricario), formerly associated with Aegis Capital Corp. (Aegis), has been subject to at least three customer complaints and three regulatory complaints during his career. Several of those complaints against Tricario concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.

In January 2021, FINRA suspended Tricario, finding that he consented to findings that he executed trades in customers’ accounts that were excessive and quantitatively unsuitable given the customers’ investment profiles. Tricarico’s trading in the accounts of three of his firms’ customers generated high cost-to-equity ratios and turnover rates as well as significant losses and commissions. Continue Reading