Articles Tagged with Breach of Contract

shutterstock_94632238-300x214The experienced securities fraud lawyers of Gana Weinstein LLP are investigating multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Andrew Bruce Elsoffer (Elsoffer). According to Elsoffer’s FINRA BrokerCheck records, there are several disclosures on his record pertaining to securities fraud, misrepresentation, unsuitability, breach of fiduciary duty, and negligence amongst other allegations.

Elsoffer entered the securities industry in 1994 and was only registered with Merrill Lynch, Pierce, Fenner & Smith, Inc. until November 2011. He is currently employed at Stifel Nicolaus & Co., Inc. since November 2011. He was previously employed at:

• Bank of America (December 2009 – October 2011)

shutterstock_32215765-300x200The securities and investment lawyers of Gana Weinstein LLP are investigating customer complaints filed with the Financial Industry Regulatory Authority (FINRA) against broker Malcolm Segal (Segal). According to FINRA’s BrokerCheck record, there are at least 11 disclosures on Segal’s record including customer complaints, multiple regulatory actions, and one employment separation from Aegis Capital Corp. The customer complaints against Segal allege misappropriation of customers’ funds, negligence, breach of fiduciary duty, and breach of contract.

Throughout his career with Aegis, Segal received number customer complaints:

January 2016: Alleging misappropriation of funds and misrepresentation. The damage amount requested is $135,000.00. This complaint is currently pending.

shutterstock_95416924-300x225The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with Financial Industry Regulatory Authority (FINRA) against broker Tracy Rae Turner (Turner). According to BrokerCheck records, Turner has been subject to at least 31 customer complaints, two employment separations for cause, one regulatory, and one financial among other claims during his 22 years of experience. The customer complaints against Turner alleges securities law violations that including unauthorized trading, fraud, breach of contract, negligence, and failure to supervise among other claims.

In a FINRA regulatory action against Turner in November 2016, the agency alleged that he offered and sold interests to investors totaling approximately $4.1 million without giving prior notice to and receiving prior written permission from his member firm. For successfully soliciting these investments, Turner received approximately $270,000 in compensation. A decision was rendered in April 2017 which resulted in barring Turner from FINRA association and fining him for $272, 879.04. The findings of the decision also alleged that Turner created a publically available offering memorandum to market sales of interest in private securities without providing a sound evaluation of investments and included false and misleading statements.

In June 2009, Turner was permitted to resign from his position at CapWest Securities, Inc. for conducting sales in states where he was not registered.

shutterstock_103610648The law offices of Gana Weinstein LLP are tracking a number of cases that have been filed against brokerage firm Interactive Brokers LLC (Interactive Brokers). These cases generally allege that due to market events affecting the customer’s accounts Interactive Brokers executed forced margin calls selling the customer’s securities. However, according to the customers Interactive Brokers did not provide investors fair pricing for the securities during the liquidations violating the “National Best Bid/Best Offer,” rule that is required in processing auto liquidations. By failing to offer fair prices for the stocks these customer their accounts were subject to additional margin calls, which results in a death spiral situation where the forced selling causes additional investment losses that causes more selling.

In one case that went to an arbitration hearing (FINRA No. 12-02766) the Claimant asserted claims of breach of contract; promissory estoppel; violation of state securities statutes; claims under common law; and vicarious liability. The Claimant alleged that Interactive Brokers’ flawed, inefficient and fraudulent margin auto-liquidation system caused auto-liquidation of the customers’ portfolios at prices inferior to the National Best Bid/Best Offer. The panel awarded the Claimant $175,000 for auto-liquidations that occurred on January 12, 2011, plus $57,200 in interest, $285,000 for auto-liquidations that occurred on August 5, 2011, and $77,000 in interest, and $72,418 for expert witness fees and other costs involved in the arbitration.

Trading on margin is a practice where the investor borrows funds from the brokerage firm and agrees to keep a maintenance margin balance or a minimum account balance. If the account value falls below the maintenance margin or the brokerage firm believes the securities are at risk at falling below that balance the firm can require investors to either deposit additional funds to bring the account back into balance or make a margin call that sells stocks in order to raise capital to pay down the loan.

shutterstock_174313244According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Michael Fasciglione (Fasciglione) has been the subject of at least 11 customer complaints and two regulatory actions. The customer complaints against Fasciglione allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, and churning (excessive trading), breach of contract, breach of fiduciary duty, negligence, fraud, misrepresentation, and failure to supervise among other claims. The customer complaints stem from 1995 through 2014 and total allegations of investor losses of multiple millions of dollars.

Fasciglione’s first regulatory action occurred in 2004, when the NYSE initiated an action for alleging that Fasciglione failed to supervise the activities of an employee related to the business of his employer; failing to supervise accounts serviced by a registered representative under his control; failing to ensure proper authorization of account designation changes, along with several other allegations. As a result, of the complaint Fasciglione was suspended for two months and required to re-take any qualifying exams before undertaking any securities supervisory positions.

Fasciglione’s latest regulatory complaint alleges that in or about March 2010, while the IRS filed a $354,752 tax lien against Fasciglione for the tax years 2007 and 2008. An amended Form U4 was filed on November 26, 2012, but FINRA found that this filing was untimely.

shutterstock_93851422According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Nigel James (James) has been the subject of at least five customer complaints and one financial matter. Customers have filed complaints against James alleging a number of securities law violations including that the broker made unsuitable investments, misrepresentations and false statements, churning (excessive trading), breach of fiduciary duty, breach of contract, unauthorized trading, among other claims. Most of these claims involve recommendations in equities.

James entered the securities industry in 2002. From October 2005 until October 2008, James was registered with J.P. Turner & Company, L.L.C. From there, James as associated with First Midwest Securities, Inc. until February 2013.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.

shutterstock_180342179On June 27, 2014, Gana Weinstein LLP filed a statement of claim against JHS Capital Advisors, LLC, formerly known as Pointe Capital Inc, on behalf of an Arkansas couple. The claims stem from the misconduct of Enver R. “Joe” Alijaj, a former Pointe Capital financial advisor who has worked at several different firms and has a record laden with customer complaints and FINRA violations. The statement of claim brought by Gana Weinstein LLP on Claimants’ behalf alleges (1) unsuitable recommendations, (2) failure to supervise, (3) breach of fiduciary duty, (4) fraudulent misrepresentation, and (5) breach of contract.

Around July 2008, Claimants, a couple from Arkansas nearing retirement, received a cold call from Mr. Alijaj—a broker with Respondent JHS. (A cold call is the solicitation of potential customers who were not anticipating such an interaction. Cold calling is a technique whereby a salesperson contacts individuals who have not previously expressed an interest in the products or services that are being offered). Mr. Alijaj aggressively pursued the Claimants’ business, promising them that he would preserve their retirement capital while providing them with increased returns.

Mr. Alijaj allegedly persuaded Claimants to give him approximately $250,000, which they believed was being safely and practically invested to accommodate their needs. Instead, Mr. Alijaj put all of Claimants’ funds into just three extremely thinly traded and highly volatile stocks. The three stocks were A-Power Energy Generation Systems Ltd. (“APWR”), Silicon Motion Technology Corp (“SIMO”), and Yingli Green Energy Holdings Co. (“YGE”). By January 2009, only five months after Mr. Alijaj made the purchases, APWR, SIMO, and YGE were each down 81%, 66%, and 59% respectively. At no point during this five-month freefall did Mr. Alijaj adjust the Claimants’ accounts or even communicate to them an explanation for the price depreciation or potential remedial action.

Recently, a Financial Industry Regulatory Authority (FINRA) arbitration panel rendered a decision concerning Wells Fargo Advisors, LLC’s (Wells Fargo) claims against its former broker Steven Grundstedt (Grundstedt) for breach of three promissory notes. FINRA Arbitration Case No. 11-02245. The FINRA arbitration panel held that Grundstedt was entitled to an offset against the outstanding balance of the first promissory note dated July 30, 2008 because Wells Fargo, then Wachovia at the time, breached an implied contract and/or the covenant of good faith and fair dealing in the contracts Grundstedt signed, causing him substantial economic damage.

shutterstock_187735889Wells Fargo claimed that Grundstedt failed to repay three separate forgivable promissory notes. Note 1 was in the principal amount of $320,000 and constituted a “transitional bonus” Grundstedt was rewarded with for moving his book of business from his former employer, Citigroup. Like the other notes in the litigation, the principal portion of Note 1 could be received in a lump sum or could be taken in monthly installments. In either case, the monthly re-payment of principal and interest was to be offset by the forgiveness of an equivalent amount conditioned upon Grundstedt’s continued employment with Wachovia’s.

According to the order, at the time Grundstedt accepted employment with Wachovia, he signed multiple agreements. One of these agreements promised Grundstedt that he would receive “support” from Wachovia including “re-assignment of accounts, walk-ins, prospective customer leads…” among other forms of company support. The panel found that Wachovia initially lived up to its promises but that the situation changed after Wachovia was acquired by Wells Fargo. In the fall of 2009, Wells Fargo consolidated operations, closed branches, and changed payouts and various other things designed with the intent to make the overall business more efficient and profitable.