Articles Tagged with Citigroup Global Markets

shutterstock_61142644-300x225Our firm is investigating customer disclosure claims concerning broker John Nelson Crook (Crook). Crook’s FINRA BrokerCheck record shows several disclosures of allegations concerning churning (excessive trading, unauthorized trading, unsuitability, and breach of fiduciary duty. His BrokerCheck records also show a disclosure concerning an employment separation after allegations.

In July 2015, Crook was discharged from Raymond James & Associates Inc due to the findings that that the financial advisor allegedly did not respond in a timely manner to a supervisory review of trading activity. In addition, Crook allegedly did not provide a legitimate explanation for the trading activity in a certain client’s account, which lead to his termination from the firm in July 2015.

The most recent customer complaint against Crook was received in November 2015.During the period between August 2006 and June 2015, Crook allegedly engaged in excessive and unauthorized trading. Crook allegedly also recommended unsuitable investment products to his client, fraudulently misrepresented, and breached his fiduciary duty. The alleged damages are worth over $4 Million and the case is currently pending.

shutterstock_70999552-300x200The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Scott Palmer (Palmer). According to BrokerCheck records, Palmer is subject to at least five customer complaints. The customer complaints against Palmer allege securities law violations that claim unsuitable investments, excessive options trading, and unauthorized investments among other claims.

The most recent complaint was filed in July 2016, and alleged $125,000 in damages due to claims that the broker made unsuitable investments in clients account while employed at Janney Montgomery Scott LLC. The complaint was settled for $75,000.

In January 2015, another customer brought a complaint against Palmer alleging that investments in the customer’s account were unsuitable based on clients’ investment objectives causing alleged damages of $226,877. The complaint was settled for $70,000.

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shutterstock_119960017The investment lawyers of Gana LLP are investigating customer complaints against broker Robert Giusti (Giusti). There are at least 4 customer complaints against Giusti and one civil action. The customer complaints against Giusti allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, and excessive trading among other claims.

The most recent complaint was filed in April 2015 and alleged unsuitable investments and excessive trading among other claims for investments made between 2010 through June 2015 causing the investor $1,326,374 in damages. A civil judgment was filed against Giusti in April 2015 for $1,100,000. Another complaint filed in January 2012 alleged unsuitable investments and unauthorized use of margin funds causing $45,000.

Giusti entered the securities industry in 1995. From November 2006 through June 2009, Giusti was associated with Citigroup Global Markets Inc. Thereafter, from June 2009 through September 2009, Giusti was briefly associated with Morgan Stanley Smith Barney. From August 2009 until December 2013, Giusti was associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated. Finally, since December 2013, Giusti has been registered with Wells Fargo Advisors, LLC out of the firm’s New York, New York office location.

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.

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shutterstock_177792281The Securities and Exchange Commission (SEC) announced enforcement actions against 36 municipal bond underwriting brokerage firms for material misstatements and omissions in municipal bond offering documents. The SEC offered favorable settlement terms to municipal bond underwriters and issuers who self-reported securities law violations leading to the settlements.

The SEC alleged that between 2010 and 2014, 36 brokerage and financial firms violated federal securities laws by selling municipal bonds using offering documents that contained materially false statements or omissions about the bond issuers’ compliance with their obligation to disclosure. The firms were also alleged by the SEC to have failed to conduct adequate due diligence to identify the misstatements and omissions before offering and selling the bonds to their customers.

The municipal bond market is a $3.7 trillion market. Continuing disclosure provides municipal bond investors with information about the solvency and financial fitness of issuers on an ongoing basis. The SEC had previously identified issuers’ failure to comply with their continuing disclosure obligations as being a major challenge for investors seeking up to date information about their municipal bond holdings.

The SEC expects that a large number of bondholders will benefit from the resulting improvements in due diligence and disclosure as a result of the settlements. The 36 brokerage firms did not admit or deny the findings but agreed to cease and desist from such violations in the future. The settlement fines were based on the number and size of the fraudulent offerings identified. In addition, under the terms of the settlement each brokerage firm agreed to retain an independent consultant to review its policies and procedures on due diligence for municipal securities offerings.

The SEC’s orders include the following brokerage firms and amounts:

  • The Baker Group, LP – $250,000
  • B.C. Ziegler and Company – $250,000
  • Benchmark Securities, LLC – $100,000
  • Bernardi Securities, Inc. – $100,000
  • BMO Capital Markets GKST Inc. – $250,000
  • BNY Mellon Capital Markets, LLC – $120,000
  • BOSC, Inc. – $250,000
  • Central States Capital Markets, LLC – $60,000
  • City Securities Corporation – $250,000
  • Davenport & Company LLC – $80,000
  • Dougherty & Co. LLC – $250,000
  • First National Capital Markets, Inc. – $100,000
  • George K. Baum & Company – $250,000
  • Hutchinson, Shockey, Erley & Co. – $220,000
  • L.J. Hart and Company – $100,000
  • Loop Capital Markets, LLC – $60,000
  • Martin Nelson & Co., Inc. – $100,000
  • Merchant Capital, L.L.C. – $100,000
  • The Northern Trust Company – $60,000
  • Oppenheimer & Co. Inc. – $400,000
  • Piper Jaffray & Co. – $500,000
  • RBC Capital Markets, LLC – $500,000
  • Robert W. Baird & Co. Incorporated – $500,000
  • Siebert Brandford Shank & Co., LLC – $240,000
  • Smith Hayes Financial Services Corporation – $40,000
  • Stephens Inc. – $400,000
  • Sterne, Agee & Leach, Inc. – $80,000
  • Wells Nelson & Associates, LLC – $100,000
  • William Blair & Co., L.L.C. – $80,000

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