Articles Tagged with Ameriprise

shutterstock_128856874-300x200According to BrokerCheck records financial advisor Mitchell Black (Black), currently employed by Ameriprise Financial Services, Inc. (Ameriprise) has been subject to six customer disputes during his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), the majority of customer complaints against Black concerns allegations over variable annuity sales practices.

In March 2019 a customer filed a complaint alleging that Black violated the securities laws by, among other things, that Black recommended inappropriate variable annuities in 2013 and 2014 and misrepresented the associated provisions causing $1,000,000 in damages.  The claim was denied by the firm.

In May 2014 a customer filed a complaint alleging that Black violated the securities laws by, among other things, that Black sold unsuitable variable annuities, REITs, and was charged excessive commissions and fees of $40,000.  The claim was settled for $24,787.

In March 2011 a customer filed a complaint alleging that Black violated the securities laws by, among other things, that Black sold unsuitable variable annuities, insurance policies, and VULs causing $750,000 in damages.  The claim was settled for $126,424.

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shutterstock_186211292-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor James Knee (Knee), formerly associated with Voya Financial Advisors, Inc. (Voya) and Ameriprise Financial Services, Inc. (Ameriprise) in Concord, New Hampshire was terminated for cause by Voya concerning allegations that Knee failed to cooperate in an internal investigation relating to potential receipt by the representative of a cash gift from a customer.  Thereafter, in May 2018, FINRA barred him from the financial industry after Knee consented to the sanction due to his refusal to appear for testimony requested by FINRA in connection with their investigation into allegations that he misappropriated customer funds.

At the same time a Merrimack County grand jury returned 11 indictments against Knee relating to conduct between 2014 and 2017.  Knee was charged with theft by misapplication, theft by deception, financial exploitation of the elderly, and investment adviser fraud.  He allegedly stole over $490,397 for personal expenses.  In addition, Knee was also indicted on perjury charges in connection with statements he made to the Bureau of Securities Regulation while it was investigating him in 2016 and witness-tampering.

Knee disclosed a number of outside business activities including Sterling Financial Services, LLC which appears to be his d/b/a through which Knee operated.  In addition, Knee also disclosed involvement with Opulencia Dressage, certain real estate rental properties, and an insurance agency.

shutterstock_180342179-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Peter Butler (Butler), in January 2017, was terminated by his firm Ameriprise Financial Services, Inc. (Ameriprise) over claims by the firm that Butler “resigned while on suspension pending termination for violation of company policy related to selling away and disclosure of an outside activity.”  In addition to the termination Butler has been subject to one regulatory action and four customer complaints.

The regulatory action by FINRA found that Butler failed to reasonably supervise a broker who was employed as a sales associate and office manager.  FINRA found that Butler failed to detect and prevent the office manager from converting money from a business organization belonging to Butler. FINRA determined that the office manager used this control to convert funds from the business in order to pay himself an additional salary and unauthorized commissions, as well as to otherwise take money to which he was not entitled. In addition, funds were converted from firm customers who were also his family members and domestic partner by depositing those funds into the business’ bank account, from which he continued to make unauthorized withdrawals.

At this time it is unknown the extent and nature of the private securities transactions that formed the basis of the employment separation.  FINRA requires brokers to disclose their outside businesses because the risk to investors is that the broker will use such businesses to engage in unauthorized securities activities.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.

shutterstock_180412949-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor William Wyman (Wyman), in January 2017, was barred by FINRA over his failure to respond to FINRA inquiries.  FINRA’s inquiries came after a customer complained about a private securities transaction.  Wyman’s employment with his brokerage firm, Ameriprise Financial Services, Inc. ended in November 2016 on the heels of the allegations.  At this time it is unknown the extent of Wyman’s private securities transactions.  His disclosures list ownership of Wyman and Shier Financial Services and do not disclose involvement in other outside businesses.

FINRA requires brokers to disclose their outside businesses because the risk to investors is that the broker will use such businesses to engage in unauthorized securities activities.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.

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 when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion.  In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public.  Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system.  Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

shutterstock_132704474Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor Cary Kievman (Kievman) alleging unsuitable investments and over concentrated positions among other claims.  According to brokercheck records Kievman has been subject to five customer complaints.

In August 2016 a customer filed a complaint involving Kievman alleging that from April 2013-October 2014, and from September 2015-December 2016, respondent recommended unsuitable short-term equities, over-concentrated the account in equities, and that he did not receive advice regarding his 2015 required minimum distribution which caused him to miss the RMD and suffer a penalty of $6,000. The claim is current pending.

In a complaint filed in March 2016, a customer alleged that Kievman recommended unsuitable investments that were over-concentrated and did not code her risk tolerance correctly or fully disclose the risks of the investments.  The customer is claiming $143,394 in damages.  The claim is currently pending.

shutterstock_24531604The securities lawyers of Gana Weinstein LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Kim Isaacson (Isaacson).  According to BrokerCheck records Isaacson has been subject to at least four customer complaints, one employment termination, and one regulatory investigation.  The customer complaints against Isaacson allege securities law violations that including unsuitable investments and misrepresentations among other claims.

In April 2016, FINRA opened an investigation for potential violations of industry rules for making verbal misrepresentations to a firm customer about the customer’s account values and performance.

In February 2016 a customer filed a complaint alleging unsuitable investments and misrepresentations with respect to equity investments in account and providing inaccurate information about the accounts performance from 2008 through 2014.

shutterstock_52426963The securities lawyers of Gana Weinstein LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Rabinder “Ravi” Deshmukh (Deshmukh).  According to BrokerCheck records Deshmukh has been subject to at least four customer complaints.  The customer complaints against Deshmukh allege securities law violations that including unsuitable investments and excessive margin among other claims.

The most recent claim was filed in June March 2016 and alleges that from 2008 to 2015, the customer was recommended and sold unsuitable, highly concentrated positions in speculative securities. In addition, the customer also alleged that they were recommended to trade on margin and seek compensatory and punitive damages in the amount of $9 million.  The complaint is currently pending.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors.  Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

shutterstock_20354398The investment lawyers of Gana Weinstein LLP are investigating a customer complaint brought before the Financial Industry Regulatory Authority (FINRA) against David Ferland (Ferland) working out of the York, Maine office allegedly received a loan of $721,408 from a customer.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.  In addition to the loan complaint there have been seven financial disclosures on Ferland’s record indicating that broker had financial trouble.

At this time it unclear the nature and scope of Ferland’s outside business activities and private securities transactions.  However, according to Ferland’s public records his outside business activities include real estate business, DL Properties LLC, The Ice House LLC, YFS, LLC, and Independent Insurance Brokering. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance agents to clients of those side practices.

Ferland entered the securities industry in 2006.  From August 2007 until August 2012, Ferland was associated with Invest Financial Corporation.  Since August 2012 Ferland has been associated with Ameriprise Financial Services, Inc.

shutterstock_93851422The investment lawyers of Gana Weinstein LLP are investigating a regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Ameriprise Financial Services, Inc. (Ameriprise) broker William Marshall (Marshall) (FINRA No. 2012033291204) and his supervisor John J. Kolinofsky, Jr. (Kolinofsky) working out of the firm’s Plano, Texas office.  According to the FINRA action against Marshall, from January 6, 2011 through May 2, 2012, Marshall participated in the sale of $1.72 million of privately issued preferred stock of BioChemics, Inc. (BioChemics) to his immediate firm supervisor, Kolinofsky, his Complex Manager, two other Ameriprise registered representatives, and several firm customers, all without having provided prior written notice to Ameriprise.

According to FINRA, Marshall received compensation for facilitating the private securities transactions in the form of common stock purchase warrants from BioChemics.  Marshall is also alleged to serve as a member of BioChemics’ Scientific Advisory Board during his association with Ameriprise and received common stock purchase warrants from BioChemics as compensation.  Moreover, FINRA found that Marshall used an unapproved personal e-mail account to communicate with firm customers about investing in BioChemics.  FINRA also alleged that Marshall distributed sales literature prepared by BioChemics to investors that failed to disclose his business and personal financial interest in BioChemics and otherwise contained misleading, exaggerated, and/or unwarranted statements and inadequate risk disclosures.

BioChemics was later found to be an investment fraud.  On December 14, 2012, the U.S. Securities and Exchange Commission (SEC) filed a civil enforcement action in the United States District Court for the District of Massachusetts against BioChemics.  In March 2015, the District Court enjoined BioChemics from violating the antifraud provisions of the federal securities laws and ordered BioChemics to pay over $17 million in disgorgement of ill-gotten gains and prejudgment interest and $750,000 as a civil penalty.

shutterstock_180341738The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Bahram Mirhashemi (Mirhashemi). According to BrokerCheck records Mirhashemi has been the subject of at least five customer complaints, one regulatory action, one regulatory investigation, two employment separations, four judgments or tax liens, and one financial disclosure. The customer complaints against McMahon allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, negligence, breach of fiduciary duty, and churning (excessive trading) among other claims.

In December 2015, FINRA initiated an investigation that looked into claims of unauthorized trades, unsuitable mutual fund switching, churning of customer accounts, fraud, misleading communications with customers, using unapproved methods of communications, filing false forms with FINRA concerning tax liens, and engaging in unapproved outside business activities. Shortly thereafter, Mirhashemi’s firm terminated him stating the FINRA investigation as the reason for the termination.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical 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.