Securities Lawyers Blog

National Securities Advisor Troy Goldberg Has Private Placement Complaints

April 5, 2021 | by Staff Attorney

Advisor Troy Goldberg (Goldberg), currently employed by National Securities (National Securities) has been subject to at least 13 customer complaints during the course of his career. According to a BrokerCheck report the six most recent customer complaints filed since 2019 appear to concern unsuitable investments in private placements investments. These allegations may concern investments in GPB Capital Holdings (GPB Capital) related investments. National Securities is known to have approved their brokers to sell GPB Capital to their clients.

On February 4, 2021 the U.S. Securities and Exchange Commission (SEC), the U.S. Attorney’s Office for the Eastern District of New York (DOJ), and seven states filed separate simultaneous actions against GPB Capital and other defendants connected to the firm accusing it of being a Ponzi-like scheme. In a press release the SEC stated that it “charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion…”

As reported by Bloomberg “If proved, [GPB] would be one of the largest such schemes to target individual investors since the massive frauds of Bernard Madoff and Robert Allen Stanford came to light.” The DOJ indicted David Gentile, the founder of GPB, Jeffry Schneider, the owner and CEO of Ascendant Capital LLC, and Jeffrey Lash, a former managing partner of GPB relating to the fraud. If convicted, the defendants each face up to 20 years’ imprisonment.[1]

Broker Chadwick David Carrick Accused of Churning and Making Unsuitable Investments

April 4, 2021 | by Staff Attorney

Broker, Chadwick Carrick (Carrick), currently employed at The Jefferey Matthews Financial Group, LLC, has been subject to at least two customer complaints and one employment termination for cause over the course of his career. The two most recent occurring in 2018. According to a BrokerCheck report, the customer complaints include churning, allegations of unsuitable investments, unauthorized trading, and altering a journal form and a letter of authorization.

As of January 2018, there is a matter pending for allegations made by a client against Carrick for, among other things, churning and breach of fiduciary duty. Additionally, in September 2018, another client alleged that Carrick made unsuitable investments and engaged in unauthorized trading. This matter settled for $35,000. Moreover, in 2009, Carrick was discharged from Morgan Stanley after working there for five years for altering a journal form and a letter of authorization previously signed by the client.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typically trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades. Churning is considered a species of securities fraud. The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

Advisor Bruce Ciallella Has Suitability Customer Complaints

March 6, 2021 | by Staff Attorney

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor Bruce Ciallella (Ciallella), currently employed by Cabot Lodge Securities LLC (Cabot Lodge) has been subject to at least seven customer complaints during the course of his career. Ciallella’s customer complaints alleges that Ciallella recommended unsuitable investments in various investments and makes allegations including fraud, excessive trading, unsuitable investments, concentrated stock positions, failure to properly manage account, unauthorized trading, breach of fiduciary duty, and misrepresentation and omissions among other allegations of misconduct relating to the handling of their accounts.

In November 2019 a customer complained that Ciallella violated the securities laws by alleging that Ciallella made investments recommendations from 2015 to 2018 that the client alleges involved self-dealing and fraud, excessive trading, unsuitable investments, concentrated stock positions, failure to properly manage account, unauthorized trading, breach of fiduciary duty, misrepresentation and omissions, and violation of the Florida securities and investor protection act. The claim alleges $300,670.64 in damages and is currently pending.

Another claim brought in October 2011 from a customer complained that Ciallella violated the securities laws by alleging that Ciallella made investments recommendations that were illegal. The claim alleged $150,000 in damages and settled for $20,000.

Advisor Joseph Hain Has Complaints Over Private Placement Reccommendations

February 22, 2021 | by Staff Attorney

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor Joseph Hain (Hain), currently employed by Noble Capital Markets, Inc. has been subject to at least two customer complaints during the course of his career. Hain’s customer complaints alleges that Hain misrepresented private placement investments among other allegations of misconduct relating to the handling of their accounts.

At Gana Weinstein LLP, we often hear from investors who were recommended by their advisors to purchase high risk private placement investments and suffered substantial – often crushing losses as a result. Our firm regularly represents these investors in disputes with the advisors and brokers who sold these products without adequate disclosure. Brokers have a responsibility to conduct due diligence on all private placement offerings. Due diligence includes an investigation into the investment’s properties including its benefits, risks, tax consequences, issuer, history, and other relevant factors.

In January 2020 a customer complained that Hain violated the securities laws by alleging that Hain made investments recommendations that were materially misrepresented concerning an investment in a private placement. The claim alleges $500,000 in damages and is currently pending.

ACG Wealth Advisor Kevin Rainwater Has Alternative Investment Complaints

February 16, 2021 | by Staff Attorney

Advisor Kevin Rainwater (Rainwater), currently employed by Arkadios Capital (Arkadios) and ACG Wealth Inc. (ACG Wealth) has been subject to at least four customer complaints and five tax liens or judgments during the course of his career. According to a BrokerCheck report these customer complaints appears to concern unsuitable investments in alternative investments. These allegations may also concern investments in GPB Capital Holdings (GPB Capital) related investments. Arkadios is known to have approved their brokers to sell GPB Capital to their clients.

On February 4, 2021 the U.S. Securities and Exchange Commission (SEC), the U.S. Attorney’s Office for the Eastern District of New York (DOJ), and seven states filed separate simultaneous actions against GPB Capital and other defendants connected to the firm accusing it of being a Ponzi-like scheme. In a press release the SEC stated that it “charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion…”

As reported by Bloomberg “If proved, [GPB] would be one of the largest such schemes to target individual investors since the massive frauds of Bernard Madoff and Robert Allen Stanford came to light.” The DOJ indicted David Gentile, the founder of GPB, Jeffry Schneider, the owner and CEO of Ascendant Capital LLC, and Jeffrey Lash, a former managing partner of GPB relating to the fraud. If convicted, the defendants each face up to 20 years’ imprisonment.[1]

Aegis Capital Advisor Thomas Duggan Has Suitability Customer Complaints

February 15, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Thomas Duggan (Duggan), currently employed by Aegis Capital Corp. (Aegis Capital) has been subject to at least three customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Duggan’s customer complaints alleges that Duggan recommended unsuitable investments in various investments and makes allegations including common law fraud, gross negligence, breach of contract, and elder abuse among other allegations of misconduct relating to the handling of their accounts.

In January 2020 a customer complained that Duggan violated the securities laws by alleging that Duggan made investments recommendations from June 2017 through August 2019 that were unsuitable and claimed common law fraud, gross negligence, breach of contract, and elder abuse. The claim alleges $1,079,155 in damages and is currently pending.

In January 2019 a customer complained that Duggan violated the securities laws by alleging that Duggan made investments recommendations from June 2017 through 2019 were in breach of his fiduciary duty, breach of contract, and misrepresentation. The claim alleges $80,000 in damages and is currently pending.

RBC Capital Advisor Brian Wudemann Has Suitability Customer Complaints

February 15, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Brian Wudemann (Wudemann), currently employed by RBC Capital Markets, LLC (RBC Capital) has been subject to at least seven customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Wudemann’s customer complaints alleges that Wudemann recommended unsuitable investments in various investments and misrepresented investment products including mutual fund securities and structured notes among other allegations of misconduct relating to the handling of their accounts.

In October 2020 a customer complained that Wudemann violated the securities laws by alleging that Wudemann made investments recommendations where the client was not made aware of the downside risk of a structured note he purchased. The claim alleges $51,522 in damages and settled for $14,000.

In August 2020 a customer complained that Wudemann violated the securities laws by alleging that Wudemann made investments recommendations from 2012 through 2018 that mispresented the nature of three mutual fund investments. The claim alleges $1,000,000 in damages and is currently pending.

In October 2018 a customer complained that Wudemann violated the securities laws by alleging that Wudemann misrepresented investments from June 2009 to July 2011. The claim alleges $44,179 in damages and an arbitration awarded $170,000 in damages.

Yellowstone Advisors David Hansen and Cameron High Fraudulently Bill Clients Out of $11.8 Million – Investor Recovery Options

February 14, 2021 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisory firm Yellowstone Partners, LLP, of Idaho Falls, and its two principals, David Hansen (Hansen) and Cameron High (High) fraudulently overbilled clients and charged fees for work not performed. According to records kept by The Financial Industry Regulatory Authority (FINRA) High was employed by Crown Capital Securities, L.P. through October 2017. If you have been a victim of Hansen’s and High’s misconduct our firm may be able to assist you in recovering funds.

According to the SEC, Yellowstone overbilled investment advisory clients as part of a fraudulent scheme to inflate the firm’s income. The SEC claims that High participated in the fraudulent scheme by causing the overbilled management fees to be charged to and taken from client accounts. The Defendants are accused and later pled guilty to stealing over $11.8 million from over 120 client accounts by overbilling clients for investment advisory management fees that were never earned.

The SEC alleged that the overbillings were taken from unsuspecting clients to generate additional revenue to cover Yellowstone’s operating expenses and to support Hansen’s lavish lifestyle. The SEC found that the advisors targeted specific accounts in a small number of larger accounts where overbilled fees would be less noticeable. In carrying out their scheme, the advisors allegedly billed client accounts twice for periodic management fees taking double the amount of fees earned during particular periods. In addition, the advisors also failed to maintain current investment advisory agreements for each client and to keep such records easily accessible for a period of five years.

On March 14, 2018, High pled guilty to one count of wire fraud before the United States District Court for the Northern District of Idaho.

Advisor Jingbo Pan Accused By Investors of Selling Unsuitable Alternative Investments

February 8, 2021 | by Staff Attorney

Advisor Jingbo Pan (Pan), currently employed by Vestech Securities, Inc. (Vestech Securities) and formerly employed by Coastal Equities, Inc. (Coastal Equities) has been subject to at least three customer complaints and one employment termination for cause during the course of his career. According to a BrokerCheck report the customer complaints concerns 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.

In February 2020 Pan was discharged for cause by Coastal Equities on allegations that Pan failed to follow firm procedures by failing to obtain prior principal approval before submitting an order for execution.

In November 2019 a customer complained that Pan violated the securities laws by alleging that Pan engaged in sales practice violations related to DPPs and breached his fiduciary duty and was negligent. The claim alleges $125,000 in damages and settled for $25,000.

In September 2019 a customer complained that Pan violated the securities laws by alleging that Pan engaged in sales practice violations related to DPPs and breached his fiduciary duty, negligent, and failed to supervise. The claim alleges $90,000 in damages and settled for $20,000.

Investor Recovery – GPB Capital Called Ponzi-Like Scheme; Fund Managers Indicted

February 8, 2021 | by Staff Attorney

The law offices of Gana Weinstein LLP continue have represented over 100 investors defrauded in GPB Capital relating investments. For nearly two years our firm has been filing complaints against the brokerage firms that wrongfully sold these products alleging that GPB Capital has all the tell-tale signs of being a scam. On February 4, 2021 the U.S. Securities and Exchange Commission (SEC), the U.S. Attorney’s Office for the Eastern District of New York (DOJ), and seven states filed separate simultaneous actions against GPB Capital and other defendants connected to the firm accusing it of being a Ponzi-like scheme. In a press release the SEC stated that it “charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion…”[1]

As reported by Bloomberg “If proved, [GPB] would be one of the largest such schemes to target individual investors since the massive frauds of Bernard Madoff and Robert Allen Stanford came to light.”[2] The DOJ indicted David Gentile, the founder of GPB, Jeffry Schneider, the owner and CEO of Ascendant Capital LLC, and Jeffrey Lash, a former managing partner of GPB relating to the fraud. If convicted, the defendants each face up to 20 years’ imprisonment.[3] New York Attorney General Letitia James accused GPB of “defrauding investors across the country out of more than $700 million through a Ponzi-like scheme that offered to pay investors generous monthly distributions they could never deliver.”[4] Further, “Investors put in more than $1.8 billion into GPB funds but were left without a single cent of profit,” said Attorney General James. The fraud was alleged to have been carried out by “failing to disclose numerous conflicted transactions involving related parties, as well as misappropriations of fund assets, all of which served to benefit” GPB and its owners.

Where did investor money go? “Investor funds were spent to subsidize private planes and luxury travel for the three defendants, direct payments totaling millions of dollars into personal bank accounts, and payments to family members. Defendant Gentile even purchased a Ferrari sports car with investor funds.” Id. Continue Reading