Securities Lawyers Blog

Advisor Gerald Eaton Terminated Over Misappropriating Investor Funds – Investor Recovery

February 3, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Gerald Eaton (Eaton) was terminated by his firm and then barred from the securities industry over allegations that he engaged in wrongful taking of customer funds among other allegations. According to BrokerCheck records, Eaton was formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm Commonwealth Financial Network (CommonWealth Financial). If you have been a victim of Eaton’s alleged misconduct our firm may be able to assist you in recovering funds.

In November 2019 FINRA barred Eaton finding that Eaton consented to the sanction and findings that he failed to provide documents and information requested by FINRA in connection with its investigation. FINRA stated that in the Form U5, Eaton’s member firm stated that the reason for the termination was that he fraudulently facilitated distributions from clients’ accounts without their knowledge or consent or for their benefit. Commonwealth discharged Eaton in October 2019 for forgery and the wrongful taking of property.

According to Eaton’s publicly disclosed records the only outside business activities disclosed including The Heritage Financial Group and subleasing office space. It is unclear at this time whether FINRA’s allegations concern these entities.

Advisor Kenneth Guerra Has Complaints Over Alternative Investment Sales

February 3, 2020 | by Staff Attorney

Advisor Kenneth Guerra (Guerra), currently employed by Independent Financial Group, LLC (Independent Financial) has been subject to at least two customer complaints, one financial disclosure, and one regulatory violation during the course of his career. According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have represented dozens of investors who suffered losses caused by these types of high risk, low reward products.

In September 2019 a customer complained that Guerra violated the securities laws by alleging that Guerra engaged in sales practice violations related investments in high-risk alternative investments, resulting in a loss of some of their retirement assets. The claim alleges $100,000 in damages and settled for $25,000.

In March 2013 a customer complained that Guerra violated the securities laws by alleging that Guerra engaged in sales practice violations related to non-traded REITs purchased in 2007 through 2008 that were misrepresented and unsuitable. The claim alleges $80,000 in damages and settled for $60,000.

Heather Weber Has Customer Complaints Over Options Trading

January 31, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Heather Weber (Weber), currently employed by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) has been subject to at least ten customer complaints during the course of her career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Weber’s customer complaints alleges that Weber recommended unsuitable investments in options among other allegations of misconduct relating to the handling of their accounts.

In September 2019 a customer complained that Weber violated the securities laws by alleging that Weber engaged in sales practice violations related to unsuitable investment recommendations and misrepresentations concerning options. The claim alleges $350,000 in damages and is currently pending.

In May 2017 a customer complained that Weber violated the securities laws by alleging that Weber engaged in sales practice violations related to unsuitable investment recommendations and misrepresentation from February 2012 to June 2014. The claim alleged $1,000,000 in damages and settled for $92,500.

There are different risky strategies that can employ options trading. One such strategy is the use of the iron condor, which involves the purchase of multiple uncovered options versus safer covered options. When an option is covered the investor holds an offsetting stock position in the asset underlying the option. The stock position can help offset the risk of the short position of the option. However, with an uncovered option the investor has unmitigated risk. If the underlying stock substantially drops or increases in value for an uncovered position the investor have only two options. Either the investor has to let the options expire and lose the entire investment or buy the stock at a disadvantageous price.

James McKinney Under Investigation For Securities Laws Violations

January 28, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor James McKinney (McKinney), formerly employed by Cetera Advisors LLC (Cetera) has been subject to at least three customer complaints, three tax liens, and one regulatory action during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), McKinney’s customer complaints alleges that McKinney recommended unsuitable investments among other allegations of misconduct relating to the handling of their accounts.

In November 2019 FINRA filed a regulatory action against McKinney alleging that he was named a respondent in a FINRA complaint alleging that he failed to comply with FINRA requests for information, documents and on-the-record testimony in connection with an investigation of him for possible violations of FINRA rules. If McKinney does not respond to the investigation the usual outcome is a bar from the securities industry.

McKinney also has three tax lien disclosures including a $622,351 lien from June 2017. The fact that a broker cannot manage his own personal finances is material information for a client to consider. In addition, the types of products clients have alleged were unsuitable are high commission products that may be recommended to generate high profits for the advisor at the expense of the client.

Advisor William Baum Subject to Multiple Customer Disputes

January 6, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor William Baum (Baum), currently employed by Great American Investors, Inc. (Great American) was has been subject to at least eight customer complaints and one regulatory action during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Baum’s customer complaint alleges that Baum recommended unsuitable investments among other allegations of misconduct relating to the handling of their accounts.

In July 2017 FINRA brought a regulatory action against Baum that he settled consenting to findings that he sent 58 text messages relating to his securities business – including messages about investment strategies and specific securities – to sixteen customers over the course of a year. FINRA found that Baum prevented his member firm from supervising those communications, violated the firm’s policy about business correspondence, and contradicted his attestation that he would use his firm’s email system for all business correspondence and retain all correspondence with customers for the firm’s review.

In September 2019 a customer complained that Baum violated the securities laws by alleging that Baum engaged in sales practice violations over the period of 2014 through 2017 by failing to recommend appropriate investments, disclose all conflicts of interest and fully inform claimants about the associated risks. The claim alleges $87,000 in damages and the case settled for $20,000.

Philip Sparacino Barred By Regulator Over Excessive Trading

January 6, 2020 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Philip Sparacino (Sparacino), formerly associated with First Standard Financial Company LLC (First Standard), has been subject to at least three customer complaints, one employment termination for cause, two financial disclosures, and two regulatory matters during his career. The majority of the customer complaints against Sparacino concern allegations of high frequency trading activity also referred to as churning or excessive trading.

In November 2019 FINRA entered into a settlement with Sparacino where he consented to the sanction and to the entry of findings that he refused to produce information and documents requested by FINRA while investigating allegations that he engaged in unauthorized, excessive, and unsuitable trading while registered through his member firm. As a result Sparacino was barred from the financial industry.

In October 2019 First Standard terminated Sparacino due to a regulatory action brought by the state of New Jersey that resulted in revoking Sparacino’s license in that state. The state of New Jersey found that Sparacino made untrue statements and omitted information and engaged in practices and a course of business which operated as a fraud or deceit and was otherwise engaged in dishonest and unethical business practices in the sale of securities resulting in a $250,000 fine and a revocation of license. The state alleged that since at least June 2019, Sparacino has engaged in a pattern of unauthorized, excessive, unsuitable, and fraudulent trading activity on behalf of customers of First Standard following the departure of many of First Standard’s agents. Sparacino had access to dozens of newly inherited customer accounts which he used as a vehicle to generate exorbitant commissions at the customers’ expense.

Advisor Clint Keener Barred By Regulator Over Unsuitable Recommendations

December 30, 2019 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Clint Keener (Keener), formerly employed by Capital City Securities, LLC (Capital City) has been subject to at least five customer complaints, three regulatory actions, and one employment termination for cause during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Keener’s customer complaint alleges that Keener recommended unsuitable investments among other allegations of misconduct relating to the handling of their accounts.

In November 2019 FINRA brought a regulatory action against Keener that he settled consenting to findings that he refused to appear for FINRA on-the-record testimony requested in connection with an investigation into potential unsuitable recommendations.

In July 2010 FINRA brought a regulatory action against Keener that he settled consenting to findings that he made unsuitable trades resulting in an overconcentration in a client account of non-investment grade bonds. FINRA also determined that certain transactions were mismarked as unsolicited when in fact thery were solicited.

Advisor Jeffrey Dixson Has Customer Complaint Over Alternative Investments and GPB Capital

December 30, 2019 | by Staff Attorney

Advisor Jeffrey Dixson (Dixson), currently employed by Madison Avenue Securities, LLC (Madison Avenue) has been subject to at least seven customer complaints and one regulatory action during the course of his career. According to a BrokerCheck report the customer complaint concerns alternative investments such private placements and direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have represented dozens of investors who suffered losses caused by these types of high risk, low reward products.

One private placement that a large number of clients of Madison Avenue were sold is GPB Capital Holdings (GPB Capital) related investments. GPB Capital is facing multiple accusations of being a Ponzi scheme, an ongoing U.S. Securities and Exchange Commission (SEC) and FBI investigations, and even GPB’s chief compliance officier being indicted for illegally obtaining information on the SEC’s investigation. Now even Volkswagen and Toyota are threatening to pull the plug on GPB Capital auto dealerships. While advisors have been telling investors to do absolutely nothing and just hang in there – this is nothing more than just additional poor advice. In November 2019 GPB Capital’s admitted that no financial audit would occur anytime in the near future. In sum, investors now know there is nothing to hang onto. By the day, advisor recommendations to do nothing appear to be completely self-serving, out of the loop, and not in the interest of the investor.

In November 2019 a customer complained that Dixson violated the securities laws by alleging that Dixson engaged in sales practice violations related to investments made between 2016 to the present in various alternative investments and fixed index annuities that were alleged as unsuitable. The allegations include Oregon Securities Law, breach of fiduciary duty, negligence and elder abuse. The claim alleges $150,000 in damages and is currently pending.

Advisor Brian Lockett Suspended By Regulator; Subject to Multiple Client Complaints

December 27, 2019 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Brian Lockett (Lockett), formerly employed by Independent Financial Group, LLC (Independent Financial) has been subject to at least nine customer complaints and one regulatory action during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Lockett’s customer complaint alleges that Lockett recommended unsuitable investments among other allegations of misconduct relating to the handling of their accounts.

In November 2019 FINRA brought a regulatory action against Lockett that he settled consenting to findings that he participated in a private securities transaction without providing prior written notice to his member firm. FINRA found that one of Lockett’s customers invested a total of $50,000 in a private placement offering and that Lockett participated in the transaction by introducing the transaction to the customer, summarizing the reasons he liked the investment, meeting with the customer to review and sign the paperwork and causing the paperwork to be submitted. FINRA found that Lockett did not receive compensation for his participation in the transaction and that Lockett attempted to conceal his role in the transaction by suggesting to the customer that the customer communicate about the transaction with Lockett in the future via Lockett’s personal email address. According to FINRA, after the customer complained to the firm, it entered into a settlement to resolve the complaint.

Advisor Genevieve Mar Has Complaints Over Alternative Investment Sales

December 27, 2019 | by Staff Attorney

Advisor Genevieve Mar (Mar), currently employed by Berthel, Fisher & Company Financial Services, Inc. (Berthel Fisher) has been subject to at least four customer complaints and one termination for cause during the course of her career. According to a BrokerCheck report the customer complaints concerns alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have represented dozens of investors who suffered losses caused by these types of high risk, low reward products.

In May 2019 a customer complained that Mar violated the securities laws by alleging that Mar engaged in sales practice violations related to investments purchased between 2010 through 2015 that were unsuitable and misrepresented to them by the representative. The customers also allege that the firm failed to supervise the actions of the representative. The claim alleges $1,500,000 in damages and is currently pending.

In July 2018 a customer complained that Mar violated the securities laws by alleging that Mar engaged in sales practice violations related to investments purchased between 2014 through 2016 were unsuitable, are not preforming as expected, and that the high risk level associated with the investments was not explained to them at the time of purchase. They also allege the firm failed to supervise the actions of the representative. The claim alleges $250,000 in damages and is currently pending.