Securities Lawyers Blog

Gana Weinstein LLP Respresents Investor In Unsuitable David Lerner Energy 11, L.P. Sale

February 6, 2021 | by Staff Attorney

The law offices of Gana LLP recently filed a complaint before The Financial Industry Regulatory Authority (FINRA) on behalf of a investor against brokerage firm David Lerner Associates, Inc. (David Lerner) involving the firm’s financial advisor, Lawrence Merl (Merl) and his recommendation to invest virtually all of the widow Claimant’s savings in an oil & gas private placement – Energy 11, L.P (Energy 11). The Claimant alleged that David Lerner failed to supervise Mr. Merl’s unsuitable recommendation and failed to conduct due diligence on the investment in Energy 11.

Energy 11 has sustained massive losses that appear to have been hidden from investors due to the fact that the sponsor of Energy 11 gets to state its own value to investors. Recently, investors in Energy 11 received value information indicating an approximate 65% loss on the investment. It is possible that the loss if far greater than even the drastic loss already being voluntarily reported by the fund. Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation.

Energy 11, L.P. is a non-traded oil and gas investment. The partnership was formed in 2013 to acquire and develop oil and natural gas properties located onshore in the United States. Energy 11 has raised over $350 million and invested the proceeds in non-operated working interests in approximately 221 existing producing wells and approximately 247 future development locations in the Sanish field located in Mountrail County, North Dakota. Whiting Petroleum Corporation (NYSE:WLL), a publicly traded oil and gas company, operates the Partnership’s well interests in the Sanish field.

Gana Weinstein LLP Files Case on Behalf of Client of Advisor Kevin McCallum and Investment in Medley Capital Corporation

February 6, 2021 | by Staff Attorney

The law offices of Gana LLP recently filed a complaint before The Financial Industry Regulatory Authority (FINRA) on behalf of a investor against brokerage firm LPL Financial, LLC (LPL) involving the firm’s financial advisor, Kevin McCallum (McCallum) and his use of discretion to invest substantial sums in Medley Capital Corporation (MCC). The Claimant alleged that LPL failed to supervise Mr. McCallum’s discretionary trading in MCC, breached their fiduciary duty to Claimant, and failed to conduct due diligence on the investment. In addition, due to the massive amount of MCC that LPL allowed Mr. McCallum to purchase on behalf of all of his clients, the Claimant alleged that LPL had an undisclosed conflict of interest in the MCC transaction.

MCC is a low-priced thinly traded security and is a non-diversified closed end management investment company incorporated in Delaware that is a business development company (BDC). MCC commenced operations on January 20, 2011 with an investment objective to generate current income and capital appreciation by lending directly to privately held middle market companies. BDCs often enter into high risk lending arrangements.

In this case, MCC was even more risky than the average BDC due to several factors including: 1) the BDC was a thinly traded micro-cap issuer and a low-priced or penny stock; 2) MCC had suffered from years of ongoing losses and declines in its business portfolio; and 3) MCC’s management was accused and found to have engaged in an unethical bidding process. Due to the foregoing high risk factors, an investment in MCC was unsuitable for the vast majority of investors and certainly unsuitable in large concentrations for any investor.

Raymond James & Associates financial Advisor Joseph Andreoli Jr has many disputes in his 33 Year career

January 19, 2021 | by Staff Attorney

Joseph Andreoli Jr is a Financial advisor. A graduate of Ramapo College of New Jersey, Mr. Andreoli Jr holds a Bachelor of Science in business. In 1987 he started his professional career at Hym Financial, INC for a year and proceeded further on his path to work for many firms such as J.B. Hanaur & Company, Smith Barney Inc., Citigroup Global Markets Inc., Wells Fargo Clearing Services LLC and is currently working for Raymond James & Associates, Inc. Mr. Andreoli was in the securities industry for approximately 33 years.

A brokerage firm or broker-dealer is in the business of buying and selling securities- stocks, bonds, mutual funds and certain other investment products on behalf of its customer for its own bank. An investment adviser is paid for providing advice about securities to clients. In addition, some investment advisers manage investment portfolios and offer financial planning services. Mr. Andreoli Jr is licensed to sell securities in 17 states.

In or around July of 2000, Mr. Andreoli Jr had his first dispute, the allegations against him consisted of the unsuitable sale of securities, negligence, breach of contract, breach of fiduciary duties, fraud, violation of industry rules, federal securities laws, and various Texas state law statutes regarding trading of treasury bonds on margin for capital gains for a requested amount of $196,275.88. The unsuitable sale of securities occurs when a broker fails to take into account customer specific information in making a recommendation. Negligence is the failure to take proper care or carelessness. Breach of contract is the breaking of legal agreement. A breach of fiduciary duty occurs when the fiduciary acts in the interest of themselves, rather than the best returns for the client. Fraud is an intentional act to deceive for personal gain. At the conclusion of the case, the Claimant in this matter was awarded $56,555 by an arbitration panel.

Gregory P. Washington of Merrill Lynch Has an Investment Complaint

January 12, 2021 | by Staff Attorney

Gregory P. Washington (CRD # 5420613) is a financial advisor at Merrill Lynch in Washington, DC. Gregory Washington has 10 years of experience and started in the securities industry in 2009 and has previously worked for such companies as Aegis Capital Corp, Spartan Capital Securities and Maxim Group.

In March of 2011 Mr. Washington was part of a civil judgement which resulted in a tax lien of $57,739 and in August of 2007 he had a civil lien for $1,612.64. His criminal record consists of one count Petit Larceny which is a class A misdemeanor, Disorderly conduct which came with a $250 fine and a $100 surcharge fee.

In September of 2018, Financial Industry Regulatory Authority (FINRA) released information about a dispute between Mr. Washington and one of his clients in the sum of just over $6.5 million dollars. Investor allegations include claims of churning, unsuitable investments, misrepresentation and breach of fiduciary duties. All of this information can be found on Finra.org/brokercheck. A $6.5 million claim is very significant and the types of claims presented are discussed below.

Crown Capital Advisor Kenneth Barroga Has Alternative Investment Complaints

December 2, 2020 | by Staff Attorney

Advisor Kenneth Barroga (Barroga), currently employed by Crown Capital Securities, L.P. (Crown Capital) has been subject to at least five customer complaints during the course of his career. According to a BrokerCheck report most of 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. Crown Capital is known to have approved their brokers to sell GPB Capital to their clients.

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 officer 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. The firm has admitted that it has never been profitable and has merely returned investor capital in the past in order to fake a successful business model. 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 June 2020 a customer complained that Barroga violated the securities laws by alleging that Barroga engaged in sales practice violations related to lack of suitability, breach of fiduciary duty, misrepresentation and omissions of material facts and lack of due diligence in connection with transactions in alternative investment products. The claim alleges $180,000 in damages and is currently pending.

In November 2018 a customer complained that Barroga violated the securities laws by alleging that Barroga engaged in sales practice violations related to misrepresentations concerning REITs and unsuitable investments in alternative investments. The claim alleges $250,000 in damages and resolved for $160,097.69 with another party settling for $40,000.

Newbridge Securities Financial Advisor Kerri Jamison Has Multiple Customer Complaints

December 2, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Kerri Jamison (Jamison), currently employed by Newbridge Securities Corporation (Newbridge Securities) has been subject to at least four customer complaints during the course of her career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Jamison’s customer complaints alleges that Jamison recommended unsuitable investments in various investments including allegations involving energy securities and alternative investments among other allegations of misconduct relating to the handling of their accounts. Jamison also hold herself out as an estate planning attorney and real estate agent.

In April 2020 a customer complained that Jamison violated the securities laws by alleging that Jamison engaged in negligent investment advice, breach of fiduciary duty, and breach of contract. The claim alleges $99,0000 in damages and is currently pending.

In February 2020 a customer complained that Jamison violated the securities laws by alleging that Jamison engaged in unsuitable investment advice, breach of fiduciary duty, and material misrepresentations. The claim alleges $200,000 in damages and is currently pending.

In January 2020 a customer complained that Jamison violated the securities laws by alleging that Jamison engaged in negligent investment advice, breach of fiduciary duty, and breach of contract. The claim alleges $99,000 in damages and is currently pending.

Triad Advisor Darrin Cohn Has Alternative Investment Complaints

December 1, 2020 | by Staff Attorney

Advisor Darrin Cohn (Cohn), currently employed by Triad Advisors LLC (Triad Advisors) has been subject to at least two customer complaints 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. Triad Advisors are known to have approved their brokers to sell GPB Capital to their clients.

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 officer 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. The firm has admitted that it has never been profitable and has merely returned investor capital in the past in order to fake a successful business model. 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 March 2020 a customer complained that Cohn violated the securities laws by alleging that Cohn engaged in sales practice violations related to unsuitable investments in alternative investments. The claim alleges $400,000 in damages and is currently pending.

In March 2020 a customer complained that Cohn violated the securities laws by alleging that Cohn engaged in sales practice violations related to unsuitable investments in multiple alternative investments. The claim alleges $200,000 in damages and is currently pending.

Advisor Martin Noonan Barred by Regulator Over Trading Claims

December 1, 2020 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Martin Noonan Jr. (Noonan), formerly associated with BMA Securities, LLC (BMA Securities), has been subject to at least one customer complaint, one regulatory action, and eight judgement or liens during his career. The complaint against Noonan concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.

In November 2018 a customer complained that Noonan violated the securities laws by alleging that Noonan engaged in sales practice violations related to account mismanagement or that the account representative engaged in unsuitable or excessive trading. The claim is currently pending and seeks $250,000 in damages.

In May 2020 FINRA barred Noonan after the broker consented to sanctions and to findings that he refused to produce information or documents requested by FINRA during an investigation that it began after reviewing a Dispute Resolution Statement of Claim filed alleging unsuitable and excessive trading in a client account. Accordingly, Noonan was automatically barred from the securities industry.

FS Energy & Power Fund Investor Losses – Recovery Options Update

November 30, 2020 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP represent investors who have lost millions in are investigating investor losses in Franklin Square Energy & Power Fund (FS Energy & Power) a business development company (BDC). When our firm first reported on this fund back in 2018 the FS Energy & Power fund was priced at $5.12 per share based on a tender offer down from its $10 offering. Now secondary market sources price FS Energy & Power at $1.10 while the sponsor claims the fund is worth $3.32. Oftentimes the sponsor value significantly lags the secondary market value.

According to the firm’s website, FS Energy is designed to provide income and growth. It invests primarily in the debt and, to a lesser extent, equity securities of private U.S. energy and power companies.

Our firm often handles cases involving direct participation products (DPPs), private placements, Non-Traded REITs, and other alternative investments. These products are almost always unsuitable for middle class investors. In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments providing perverse incentives for brokers to sell high risk and low reward investments.

New York City REIT Investors Suffer Massive Losses – Investor Recovery

November 28, 2020 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP represent investors who have lost millions investing in American Realty Capital New York City REIT (ARC New York REIT, New York City REIT, or NYC REIT) (Ticker Symbol: NYC) a non-traded real estate investment trust (Non-Traded REIT) that recently went public.

Our firm often handles cases involving direct participation products (DPPs), private placements, Non-Traded REITs, and other alternative investments. These products are almost always unsuitable for middle class investors. In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments providing perverse incentives for brokers to sell high risk and low reward investments.

In 2018 NYC REIT ceased making distributions. However, the REIT continued to tell investors that the investment was worth at least $20.26 a share on their initial $25 per share price investment while secondary market sources were projected massive losses. In early 2020 NYC REIT announced that it would go public. REIT investors would realize shares subject to a 2.43-to-1 reverse stock split. Thereafter, 75% of client funds would be converted into Class B shares which could not be sold and would remain illiquid. NYC REIT told investors that by the end of the first listing year all Class B shares would be converted into Class A shares which could be sold on the market.

Once NYC REIT went public and the true value of NYC REIT was revealed investors lost a significant portion of their investment seemingly overnight. At the initial public offering (“IPO”), NYC REIT lost almost 44% of its value in that first trading session. By the end of October 2020 NYC REIT had lost over 63% of its initial public offering price. Investors in NYC REIT have suffered losses of approximately 85% of their initial investment in the Non-Traded REIT and still cannot liquidate the majority of their investment.

As a law firm that represents investors, we have watched the same story as NYC REIT play out over and over again where real estate and other assets are touted as safe and reliable investments only to realize significant losses when the true value is revealed.