Securities Lawyers Blog
According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Christopher Veale (Veale) has been the subject of at least 12 customer complaints, six judgment and lien of over $1,000,000 and five separate regulatory actions, two investigations by state regulators and one criminal matter involving a felony over the course of his career. Customers have filed complaints against Veale alleging a litany of securities law violations including that the broker made unsuitable investments, unauthorized trades, breach of fiduciary duty, misrepresentations and false statements, churning, and fraud, among other claims. Many of the claims involve recommendations in penny stocks and other speculative securities.
An examination of Veale’s employment history reveals that Veale moves from troubled firm to troubled firm. The pattern of brokers moving in this way is sometimes called “cockroaching” within the industry. See More Than 5,000 Stockbrokers From Expelled Firms Still Selling Securities, The Wall Street Journal, (Oct. 4, 2013). In Veale’s 18 year career he has worked at 18 different firms.
Since 2008 Veale has been registered with Maximum Financial Investment Group, Franklin Christopher Investment Bankers, Inc., Brookville Capital Partners, Blackwall Capital Markets, Inc., Meyers Associates, L.P., John Thomas Financial, and Legend Securities, Inc., until February 2015.
Many of these brokerage firms have been the subject of regulatory action. In particular John Thomas Financial was expelled from the industry. John Thomas Financial was run by Anastasios “Tommy” Belesis who recently agreed to be banned from the securities industry when the SEC accused him of defrauding investors in two hedge funds. In addition, John Thomas faced allegations of penny-stock fraud by FINRA after the firm reaped more than $100 million in commissions over its six-year history before it closed in July. According to new sources trainees at the firm earned as little as $300 a week to pitch stocks with memorized scripts.
According to FINRA, the agency began investigating Veale in January 2015. The examination was focused on a review of Veale’s outside securities accounts, outside business activities and potential sales practice concerns in Veale’s customer accounts. FINRA was also concerned that Veale potentially violated the industries rules by failing to disclose certain outstanding liens and judgments
At the time FINRA began the examination Veale was registered with Legend Securities. FINRA discovered that Veale also was working for a company called Legend Advance Funding (LAF). FINRA found that Veale’s employment with LAF was not disclosed on his Form U4. According to LAF’s website its business involves making merchant cash advances to small to mid-size businesses. On February 20, 2015, after FINRA learned that Veale was working for LAF, Veale terminated his registration with Legend.
The activities alleged of, are referred to as “selling away” in the industry. 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. However, even though the brokerage firm claim ignorance of their advisor’s activities, under the FINRA rules, a brokerage firm owes a duty to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion.
The number of complaints and regulatory actions against Veale is relatively large by industry standards. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must disclose different types of events, not necessarily all of which are customer complaints. These disclosures can include IRS tax liens, judgments, and even criminal matters.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases where their broker has acted inappropriately. Our consultations are free of charge and the firm is only compensated if you recover.