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shutterstock_160304408-300x199According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor John Maccoll (Maccoll), formerly associated with UBS Financial Services Inc. (UBS) in Birmingham, Michigan was barred by FINRA. In addition, The Securities and Exchange Commission (SEC) charged Maccoll with defrauding his brokerage customers out of nearly $4 million in an investment scam.

According to the SEC’s complaint, Maccoll used high pressure sales tactics to solicit at least 15 of his retail brokerage customers to invest in what he described as a highly-sought-after private fund investment. The SEC claims that most of the victims were elderly and retired and invested through their retirement accounts. The SEC claims that Maccoll told his customers that the purported fund investment would allow them to diversify their portfolios, receive annual investment returns as high as 20%, and give them investment growth potential that was better than the growth they received in their brokerage accounts.  The SEC alleges that these statements were false and that Maccoll did not invest the customers’ money but in fact stole it for his own personal use.  The SEC charged that $3.6 million was spent on his own personal expenses.  To conceal the scheme, the SEC alleged that Maccoll instructed his customers not to tell others about the purported fund investment, provided some of his customers with fake account statements reflecting fictitious returns, and paid over $400,000 in Ponzi-like payments to certain of the customers to keep the scheme alive.

In conjunction with the SEC’s action, the U.S. Attorney’s Office for the Eastern District of Michigan filed criminal charges against Maccoll.

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shutterstock_162013331-300x199There is a need for strong protection of the elderly investing population. About one out of every five Americans 65 years and older has been a victim of financial abuse.  The elderly are estimated to lose up to $2.9 billion per year from scams.   In fact, these figures are likely lower than the actual incidence of fraud since only reported accounts of frauds are considered and seniors are “less likely” to report being scammed.

Elders are abused by a variety of persons including family members, caregivers, and scam artists.  Unfortunately, financial advisers, fiduciaries (such as agents under power of attorney and guardians), and brokers also have known to take advantage of the elderly.  Usually the person is already in a position of trust or is able to acquire a high level of trust due to the diminished capacity of the victim.

Brokerage firms are in the perfect position to recognize the signs elder abuse and elder fraud.  Firms should be able to recognize diminished capacity and dementia, decreased ability to handle finances, questionable purchases or transfers, and the inability of their clients to understand or comprehend their financial assets.   When there are reasonable grounds to believe a firm client is being financially exploited the member firm must report potential exploitation to proper authorities and otherwise hold transactions pending review and determination.

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shutterstock_20354401-300x200The law offices of Gana Weinstein LLP continue to investigate the Massachusetts Securities Division’s enforcement action and administrative complaint against ARO Equity, LLC (ARO Equity), Thomas David Renison (Renison), and Timothy James Allcott (Allcott).  The complaint alleges that ARO Equity is Ponzi-scheme.

Upon information and belief former broker Barry Horowitz (Horowitz) recommended Renison and ARO Equity to his investment and legal clients.  Horowitz was employed by Lincoln Financial Securities Corporation (Lincoln Financial) until August 2018.  At the same time Horowitz worked as an attorney with Nirenstein, Horowitz & Associates, P.C.

In the ARO Equity fraud, the state of Massachusetts claimed that Allcott was the manager of ARO Equity and together with Renison took $5.8 million of investor funds since August 2015.  The complaint alleges that these funds were raised through the sale of unsecured promissory notes promising 8-12% annual returns over three to five-year terms.  The complaint alleges that investors made significant investments from their retirement accounts by transferring qualified retirement assets to a self-directed IRA to invest in ARO Equity.  Despite representations of safety, the complaint alleged that ARO Equity principals have received undisclosed and excessive commission payments and executive compensation for soliciting investments and bears the hallmarks of a Ponzi scheme.  In fact, the complaint claims that ARO Equity has only “invested” approximately half of the money received from investors and lost most of it.

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shutterstock_21147109-300x234The investment fraud attorneys are currently investigating USA Financial Securities Corporation (USA Financial) broker Bradley Ford (Ford). According to BrokerCheck Records held by the Financial Industry Regulatory Authority (FINRA), Ford has been subject to eight customer disputes and three regulatory disputes. The majority of these disputes concern the misrepresentation of investments and documents to customers.

Most recently, in April 2018, a customer alleged from August 2013 to November 2016, Ford misrepresented that liquidity and penalty charges of fixed indexed annuities.

In June 2015, a customer alleged that Ford forged the customer’s signature on a strategy request form.

In March 2012, a customer alleged the insurance life policy that Ford recommended and placed the customer in was falsely represented. The case was settled at $450,000 in damages.

Ford has also been subject to various regulatory actions. In June 2009, the Kentucky Department of Insurance found that Ford misrepresented documents to customers by changing the state in which customers had signed their insurance contracts. The Kentucky Department of Insurance imposed a monetary penalty for the false representation.

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shutterstock_102217105-300x200The securities attorneys at Gana Weinstein LLP are currently investigating Aeon Capital Inc (Aeon Capital) broker Wayne Miller (Miller). According to BrokerCheck Records held by the Financial Industry Regulatory Authority (FINRA), Miller has been subject to three customer disputes, a regulatory action, and a financial action.

In December 2017, FINRA suspended Miller for failing to properly supervise his firm’s chief compliance officer (CCO) and direct supervisor as the member firm’s president. Miller also failed to respond to red flags that the system of supervision was deficient and that the CCO was not properly supervising the registered representatives of the firm. During the time, a registered representative at the firm was employing an unsuitable “swing trade” strategy by excessively trading mutual fund “A” shares in customer accounts. The CCO informed Miller that one of the registered representatives of the firm was excessively trading mutual fund “A” shares in customer accounts, and Miller did not contact the mutual fund customers – which could’ve led him to learn about 11 of the other affected customers. Miller also failed to properly supervise the CCO – who demonstrated her difficulty with analyzing the firm’s trade blotter and mutual fund switch reports even with the help of a compliance consultant. Consequently, Miller incurred a fine of $10,000 and was suspended for 6 months.

In addition, Miller has been subject to multiple customer complaints. In August 2018, a customer alleged that Miller misrepresented investments, over-concentrated the customer account, breached fiduciary contract and duty, and was negligent with the customer funds. The case was settled at $95,000.

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shutterstock_182054030-300x200The investment fraud attorneys at Gana Weinstein LLP are currently investigating Stoever, Glass & Company Inc. (Stoever, Glass & Company) broker Adam Goodman (Goodman). According to BrokerCheck Records held by the Financial Industry Regulatory Authority (FINRA), Goodman has been subject to three customer disputes, one of which is still pending. The majority of these disputes concern the misrepresentation of investments and unauthorized trading of customer accounts.

Most recently, in April 2018, a customer alleged that Goodman engaged in numerous fraudulent practices, not limited to high pressure sales practices, unsuitable investment recommendations, and negligence with customer accounts. The customer has requested $25,000 in damages. This dispute is currently still pending.

In August 2017, a customer alleged that from 2013 to 2017, Goodman executed unauthorized trades in the customer account and over-concentrated investments. The case was settled at $21,000 in damages.

In December 2016, a customer alleged that Goodman falsely represented the nature of investments to the customer and executed trades in the account without the customer’s prior authorization. The case settled at $50,000 in damages.

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). Under the NASD Conduct Rule 2510(b), a broker is prohibited from trading in a non-discretionary customer account without prior written authorization from the customer. Unauthorized trading is a type of investment fraud because the Securities Exchange Commission (SEC) has found that disclosures of trades being made are essential and material to an investor. Unauthorized trading is often a gateway violation to other securities violations including churning, unsuitable investments, and excessive use of margin. Continue Reading

shutterstock_12144202-300x200The securities attorneys at Gana Weinstein LLP have been investigating Wells Fargo Clearing Services, LLC (Wells Fargo) broker Bryan Musso (Musso). According to BrokerCheck Records kept by the Financial Industry Regulatory Authority (FINRA), Musso has been subject to six customer disputes, one of which is still pending. The majority of these disputes concern unsuitable investment recommendations in retirement plans and in oil and gas securities. The law offices of Gana Weinstein LLP continue to report on investor related losses and potential legal remedies due to recommendations to investor in oil and gas and commodities related investments.

Most recently, in December 2017, Musso was subject to a customer dispute in which a customer alleged that Musso placed the customer in unsuitable oil and gas securities. This dispute is currently still pending.

In May 2011, a customer alleged that Musso made poor, unsuitable retirement plan recommendations and placed the customer into unsuitable investments. The case was settled at $445,220.

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shutterstock_177792281-300x198The securities attorneys at Gana Weinstein LLP are currently investigating Woodbury Financial Services, Inc. (Woodbury Financial) broker Richard Ginsberg (Ginsberg). According to BrokerCheck Records kept by the Financial Industry Regulatory Authority (FINRA), Ginsberg has been subject to two pending customer disputes concerning unsuitable alternative investments.

Most recently, in December 2017, Ginsberg was subject to a customer complaint in which the customer alleged that Ginsberg had placed the customer in unsuitable investments. This dispute is currently still pending.

In addition, in November 2017, a customer alleged that Ginsberg had placed the customer in unsuitable Real Estate Investment Trusts (REITs). The REITs were unsuitable for the customer in terms of the customer’s investment objectives and risk tolerance. The customer has requested $1,000,000 in damages. This dispute is currently still pending.

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shutterstock_62862913-259x300The investment fraud attorneys at Gana Weinstein LLP are currently investigating Wells Fargo Clearing Services, LLC (Wells Fargo) broker Peter Malis (Malis). According to BrokerCheck Records kept by the Financial Industry Regulatory Authority (FINRA). According to BrokerCheck Records, Malis has been subject to five customer disputes, the majority concerning unsuitable investments in mutual funds, municipal bonds, and limited partnerships.

Most recently, in December 2017, a customer alleged that from February 2006 to December 2016, Malis placed the customer in unsuitable investments and executed trades in the account without the customer’s consent.

In September 2016, a customer alleged that from March 2002 to January 2016, Malis placed the customer in unsuitable investments and engaged in unauthorized trades and churning of the account. The case was settled at $1,100,000.

In May 1995, a customer alleged that Malis placed the customer in unsuitable mutual funds and limited partnerships. The case was settled at $12,500.

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shutterstock_145368937-300x225According to BrokerCheck records financial advisor Joseph Yanofsky (Yanofsky), currently associated with First Financial Equity Corporation (First Financial), has been subject to eight customer complaints, one regulatory action, and one employment separation for cause.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Yanofsky has been accused by customers of unauthorized trading, unsuitable trading, and misrepresentations among other claims.

In 2015 Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) terminated Yanofsky alleging that the broker exercised discretion in discretionary accounts and provided inaccurate responses to the firm.  Thereafter, FINRA sanctioned Yanofsky in September 2017 findings that he exercised discretion in customer accounts without written authorization to do so. The findings stated that Yanofsky’s exercise of discretion occurred in connection with certain of his member firm’s syndicate equity offerings.  FINRA found that Yanofsky’s customers verbally expressed their general desire and authorization to participate syndicate offerings however their verbal authorization to participate in every syndicate offering was never reduce to writing.

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