Securities Lawyers Blog

Advisor Ferrell Rollins Terminated for Borrowing Customer Funds

May 14, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Ferrell Rollins (Rollins) has been accused by his former employer of borrowing client funds among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Rollins has been terminated by his prior employer, Capital Investment Group, Inc. (Capital Investment Group) concerning his outside business activities. If you have been a victim of Rollins’ alleged misconduct our firm may be able to assist you in recovering funds.

In September 2019 Capital Investment Group terminated Rollins after alleging violation of firm policy and FINRA Rules 2010 and 3240 related to borrowing money from a customer and making false statements to the firm on forms related to said loan.

Rollins’ outside business activities disclosed on his publicly available BrokerCheck report include Telco Credit Union.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Advisor Jason LaBelle Sanctioned Over Outside Business Activities – Investor Recovery

May 14, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Jason LaBelle (LaBelle) has been accused by a securities regulator of potentially engaging in the sales of private securities among other allegations. LaBelle was sanctioned by The Financial Industry Regulatory Authority (FINRA) concerning his private securities and undisclosed outside business activity conduct. According to BrokerCheck records, LaBelle was formerly registered with FINRA member firm LPL Financial LLC (LPL Financial). If you have been a victim of LaBelle’s alleged misconduct our firm may be able to assist you in recovering funds.

In January 2020 FINRA found that that LaBelle consented to the sanctions and findings that he participated in an outside business activity involving a real estate development project that was financed with money lent by one of his customers without providing prior written notice to his firm. FINRA found that LaBelle falsely confirmed that he had fully disclosed his outside business activities on two annual compliance questionnaires submitted to his firm.

In June 2017 a customer filed a complaint concerning LaBelle where the customer alleged that LaBelle violated the securities laws by alleging the advisor made misrepresentations on the terms of a promissory note he recommended Plaintiffs purchased in February 2016, and without authorization withdrew money to purchase the note from Plaintiffs’ taxed deferred accounts. The complaint is currently pending.

According to LaBelle’s publicly disclosed records the he has several disclosed outside business activities including Berkshire Retirement Strategies (his d/b/a for LPL Financial), Brickhouse Mountain LLC (owner of office building), and Private Advisory Group (an RIA d/b/a).

Advisor Paris Lewis Terminated for Borrowing Money From A Client – Investor Recovery

May 13, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Paris Lewis (Lewis) has been accused by his former employer of borrowing funds from a client among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Lewis has been terminated by his two prior employers concerning his outside business activities. According to BrokerCheck records, Lewis was formerly registered with FINRA member firm NYLife Securities LLC (NYLife Securities) and MetLife Securities Inc. (MetLife). If you have been a victim of Lewis alleged misconduct our firm may be able to assist you in recovering funds.

In December 2019 NYLife Securities terminated Mr. Lewis after alleging that he was terminated after he violated company policy by borrowing money from a customer. The company became aware of this matter when the company received a verbal customer complaint.

In February 2015 Metlife terminated Mr. Lewis after alleging that he did not follow firm policy regarding outside business activities.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Securities-Back Lending Risks Step Back Into the Spotlight Amidst Market Declines

May 13, 2020 | by Staff Attorney

Due to recent market decline and volatility, the investment attorneys of Gana Weinstein LLP have been contacted by a number of investors who hold non-purpose loans secured by their brokerage accounts. Due to market movements, investment losses have jeopardized their ability to repay the loan. In other situations advisors have been slow to reach out to clients in order to take steps to either voluntarily sell assets or increase their collateral to protect their accounts.

In recent years all the major wire houses have become involved in selling their wealthier clients on securities-backed lines of credit (SBLOCs). These loans that are often marketed by brokerage firms to investors as an easy way to cash out your securities accounts by borrowing against the assets in your portfolio without actually having to liquidate securities. The concept is conceptually similar to margin but the loan is issued by a bank and held in a different account then the investments.

These lines of credit allow investors to borrow money using securities held in the investment accounts as collateral and allow the investor to continue to trade securities in the pledged accounts. An SBLOC requires typically requires monthly interest-only payments until repaid. Thus, when an investor losses a significant amount of their portfolio the investor has made very little progress in repaying the loan and may have few to no options to pay the loan back.

James Kirchner Has Complaints Over Private Placement Sales Practices

May 12, 2020 | by Staff Attorney

Former stockbroker James Kirchner (Kirchner), former employed by brokerage firms David A. Noyes & Company (David Noyes), IFS Securities, and Cabot Lodge Securities LLC (Cabot Lodge) has been subject to at least seven customer complaints and one employment terminations for cause during the course of his career. According to a BrokerCheck report some of the customer complaints concern private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk products when they are not vetted appropriately by the firm selling them.

In March 2020 a customer complained that Kirchner violated the securities laws by alleging that Kirchner engaged in sales practice violations related recommending alternative investments that were not suitable. The claim alleges $175,000 in damages and was settled for $90,000.

In January 2020 a customer complained that Kirchner violated the securities laws by alleging that Kirchner engaged in sales practice violations related to recommending private placements during 2016 and 2017 that were not suitable. The claim alleged $300,000 in damages and was settled for $145,000.

In July 2019 a customer complained that Kirchner violated the securities laws by alleging that Kirchner engaged in sales practice violations related to recommending private placements during 2016 that was not suitable. The claim alleged $100,000 in damages and was settled for $50,000.

Goldman Sachs MLP Income Opportunities Fund – Investor Loss Recovery

May 12, 2020 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating investor claims of unsuitable investments in oil and gas related products. Our firm is currently representing a number of investors who lost substantial savings due to poor advice to concentrate holdings in speculative commodities investments like master limited partnerships (MLPs). Goldman Sachs MLP Income Opportunities Fund (NYSE: GMZ) is a mutual fund that invests primarily in MLPs

In the past year the Goldman Sachs MLP Income Opportunities Fund has returned a -78% return as of April 30, 2020.

As a background, MLPs are publicly traded partnerships. About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. There are about 130 MLPs trading on major exchanges that focus on energy related industries and natural resources.

Wall Street loves MLPs because they provide high yields to investors and require companies to pay Wall Street in order to continue to grow. In 2013 banks earned fees of $890.3 million from MLP issuance. Bloomberg quoted an analyst stating that “MLPs are Wall Street’s dream,” because “[t]hey’re fee machines.” Naturally, in order to entice investors to continue to invest in MLPs Wall Street pumps up MLPs every chance they get. According to Bloomberg, in May 2014 “[a]nalysts predict that 93 of the 114 MLPs in existence will rise in value in the next year…” Astonishingly, “all but five MLPs are recommended by the majority of the analysts who cover them.” At that time professionals without conflicts called MLPs “the next great investment debacle” and warned that “many MLP shareholders…may not understand what they’ve gotten into.”

William Braun Has Complaints Over Private Placement Sales Practices

May 11, 2020 | by Staff Attorney

Advisor William Braun (Braun), currently employed by National Securities Corporation (National Securities), has been subject to at least eight customer complaints and regulatory action during the course of his career. According to a BrokerCheck report some of the customer complaints concern private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk products.

In January 2020 a customer complained that Braun violated the securities laws by alleging that Braun engaged in sales practice violations related to breach of fiduciary duty, negligence, and unsuitable recommendations concerning investment(s) in private placements. The claim alleges $125,000 and is currently pending.

In November 2019 a customer complained that Braun violated the securities laws by alleging that Braun engaged in sales practice violations related to unsuitable recommendations concerning investment(s) in private placements. The claim alleges $200,000 and is currently pending.

Merrill Lynch Financial Advisor Juan Barreras Has Suitability Customer Complaints

May 11, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Juan Barreras (Barreras), currently employed by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) has been subject to at least five customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Barreras’ customer complaints alleges that Barreras recommended unsuitable investments in various investments including allegations of unsuitable municipal bonds and mutual fund securities among other allegations of misconduct relating to the handling of their accounts.

In August 2019 a customer complained that Barreras violated the securities laws by alleging that Barreras made investments recommendations in unsuitable investment recommendations and misrepresentation. The claim alleges $800,000 in damages and is currently pending.

In January 2019 a customer complained that Barreras violated the securities laws by alleging that Barreras made investments recommendations in unsuitable investment recommendations and misrepresentation. The claim alleges $600,000 in damages and is currently pending.

In August 2016 a customer complained that Barreras violated the securities laws by alleging that Barreras made investments recommendations in unsuitable investment recommendations, misrepresentation and omission of material facts from January 2011 to December 2016. The claim alleges $500,000 in damages and settled for $125,000.

Advisor Dana Vietor Sanctioned Over Promissory Note Sales

May 10, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Dana Vietor (Vietor) has been accused by his former employer and a financial regulator of selling a non-approved product among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Vietor was terminated by his prior employer, CFD Investments, Inc. (CFD Investments) concerning his outside business activities. Thereafter, FINRA barred Vietor from the securities industry relating to sales activities. If you have been a victim of Vietor’s alleged misconduct our firm may be able to assist you in recovering funds.

In November 2018 CFD Investments terminated Vietor after alleging that he engaged in private securities transactions without providing information to the firm or seeking approval for the transactions. Financial adviser submitted annual questionnaires to the firm advising the firm that he was not engaging in private securities transactions.

In March 2020 FINRA filed a regulatory action against Vietor finding that Vietor consented to sanctions and findings that he engaged in the sale of promissory notes called deposit agreements totaling more than $3 million without disclosing and receiving approval from his member firms for the private securities transactions. FINRA also found that Vietor was engaged in a start-up business venture that required funding and that the deposit agreements raised funds for entities associated with the business venture.

Vietor’s outside business activities disclosed on his publicly available BrokerCheck report include Financial Independence Corporation, SRS Holdings LLC, and SRS Management LLC.

UBS ETRACs Investor Loss Recovery Options

May 9, 2020 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP are investigating investors who were inappropriately recommended UBS ETRACs related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in these speculative and volatile investment offerings. UBS ETRACs are exchange-traded notes that track and provide monthly payments based on a variety of market indexes. Many of the ETRACs offerings amplify their returns and risk of the index through the use of leverage.

ETRACs symbols include HDLV, SMHD, DVHL, CEFL, CEFZ, BDCL, LBDC, MORL, MRRL, LRET, MLPQ, HOML, MLPZ, LMLP and WTID.

Close to 30 of these ETRACs leveraged and inverse exchange-traded products had been delisted, closed, or automatically accelerated due to volatility in the wake of COVID-19. These products are being delisted as they fall in value below the minimum listing standard outlined in the offering documents.

As a background, an exchange-traded note (ETN) is an unsecured debt security issued by an underwriting banking institution. Many of the largest brokerage firms underwrite these types of products due to the large fees that they can generate for simply creating the security. Similar to other kinds of debt securities ETNs have a maturity date. ETNs also carry the risk that they are backed only by the creditworthiness of the issuer and not the value of the underlining securities.

ETRACs investments effected include: