Articles Tagged with AllState

The law offices of shutterstock_183525503Gana Weinstein LLP has filed an arbitration complaint before the Financial Industry Regulatory Authority (FINRA) alleging damages in excess of $3.7 million against Allstate Financial Services, LLC (Allstate) and the estate of Paul J. Godlewski (Godlewski).  The complaint alleges improper supervision and selling away related to Godlewski’s fraudulent Ponzi scheme.  Godlewski’s scheme was targeted at the retirement savings of around two dozen victims, mostly in the Pennsylvania area.  The complaint alleges that Allstate failed to properly supervise and enforce compliance measures over Godlewski, one of Allstate’s registered representatives.  The failure to supervise was alleged to cause violations of federal, state securities laws, and the financial industry’s rules and regulations.  The complaint alleged that these investors, many of whom used IRA or 401K proceeds, have lost substantially all of their investment.

“I believe there are more victims out there who are in need of help to assert their rights under the securities industry rules,” according to securities attorney Adam Gana.  As background on Godlewski, the broker was barred from the securities industry by FINRA in April 2015 after failing to respond to the regulator’s requests concerning his activities.  In June 2015, Godlewski passed away.  After Godlewski’s death many of his investors received letters from Godlewski’s estate stating that the estate was conducting a four to six months accounting on the assets and liabilities left behind by Godlewski.  Beyond these brief correspondence, investors have been left in the dark as to the status of their funds.

In the complaint, it is alleged that Godlewski created a fictional persona of a brilliant venture capital fund manager in order to sell investors.  Godlewski claimed that he created innovative trading algorithms and and managed funds with $100 million in assets under management.  To promote this persona Godlewski made appearances on television talk shows such as Money Matters purporting to be the president of Global Enterprise Investment Venture Capital a/k/a GEIVC.  GEIVC was one of the fraudulent funds that the complaint alleged Godlewski sold to claimants.  Over time Godlewski’s scheme is alleged to evolved and improved in order to better protect Godlewski from being found out.  These other more sophisticated funds include Tall Tree Note Fund I, LP (Tall Tree), another Godlewski fund, and 611 Swede Street LLC, a real estate property investment.

Diego Fernando Hernandez (Hernandez) was recently barred from the financial industry by the Financial Industry Regulatory Authority (FINRA) concerning allegations that he failed to disclose outside business activities, a practice known in the industry as “selling away” and misused customer funds.

Hernandez entered the securities industry in May 1998.  In August 2005, Hernandez became a registered representative of AllState Insurance Company until April 2012.  In April 2012, Hernandez became a registered representative of AXA Advisors, LLC (AXA) until February 2013.  On Hernandez’s public securities disclosures he is listed as the owner of H.D. Mile High Marketing a marketing, advertising, and banner company located in Lakewood, Colorado.  In February 2013, AXA filed a termination notice for Hernandez disclosing that his employment was terminated by the firm for failure to comply with the firm’s policies and FINRA’s rules in connection with undisclosed outside business activity and the commingling and conversion of customer funds.

While Hernandez was associated with AXA, FINRA alleged that he engaged in at least three outside business activities that were not disclosed to or approved by the firm.  In March 2012, Hernandez filed articles of organization, forming Wealth Management Partners LLC (Wealth Management Partners) where Hernandez serves as Wealth Management’s president and chief executive officer.  In February 2010, Hernandez formed Team Cure Racing as a nonprofit corporation under the laws of Colorado.  In November 2009, Hernandez formed DFHR Investments, Inc. (DFHR Investments) under the laws of Colorado.  Hernandez is the president of DFHR Investments.  Hernandez filed the Wealth Management Partners, Team Cure Racing, and DFHR Investments corporate formation documents before he joined AXA.

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