Articles Tagged with conversion

shutterstock_63635611The investment fraud lawyers of Gana Weinstein LLP are investigating the regulatory investigation filed by The Financial Industry Regulatory Authority (FINRA) against broker Douglas Simanski (Simanski). According to BrokerCheck records Simanski is subject to five customer complaints one FINRA matter and one employment separation for cause.  The FINRA regulatory matter concerns the agencies attempt to investigate the circumstances surrounding alleged sales of private securities transactions and client fund conversion. (FINRA No. 2016049621301).  When Simanski refused to cooperate with the investigation, FINRA automatically barred Simanski from the industry.

According to FINRA, Simanski consented to the sanction and findings related to an investigation into allegations for conversion of funds.  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”.  At this time it unclear the nature and scope of Simanski’s outside business activities and private securities transactions.  Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance to clients of those side practices.

Simanski entered the securities industry in 1995.  From 1999 until June 2016 Simanski was registered with Next Financial Group, Inc. out of the firm’s Altoona, Pennsylvania office location.  At that time Simanski was terminated over allegations that he sold fictitious investments and converted the funds for his own personal use and benefit.

shutterstock_180342155According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Roderick Yzaguirre (Yzaguirre) has been the subject of at least 10 customer complaints and one firm termination. Customers have filed complaints against Yzaguirre alleging that the broker made misrepresentations concerning investments and misappropriated their funds among other claims. To date investors have accused Yzaguirre of misappropriating approximately $3,000,000 in client funds with the true extent of Yzaguirre alleged misconduct still unknown.

Yzaguirre has been a FINRA broker since 1994. From October 2009, through April 2015, Yzaguirre has been associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) out of their Ontario, California branch. Merrill Lynch accused Yzaguirre of conduct involving potential misappropriation of client funds and misrepresentations of securities at the time of his termination from the firm.

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 engaging in illegal investments activity.  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. Investment schemes often occur 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.

shutterstock_143448874The Financial Industry Regulatory Authority (FINRA) recently barred broker Robert Tricarico (Tricarico) concerning allegations that Tricarico failed to respond to the regulator’s requests to provide information and documents concerning the an investigation into claims that Tricarico may have stolen money from clients.

Tricarico entered the securities industry in 1986. From June 2003, until April 2009, Tricarico was associated with Citigroup Global Markets Inc. Thereafter, from March 2009, to May 2011, Tricarico became registered with Wells Fargo Advisors Financial Network, LLC (Wells Fargo). Finally, from May 2011, until January 2015, Tricarico was associated with LPL Financial LLC (LPL).

On a Form U5, LPL terminated Tricarico alleging that the broker was the subject of a lawsuit by the executrix of a deceased client that alleged misappropriation of funds. Thereafter, FINRA sought to investigate LPL’s statements by sending Tricarico requests for information. On January 22, 2015, FINRA sent a letter to Tricarico requesting that Tricarico provide documents and information including his personal bank account records. Despite, multiple requests for information and some additional correspondence with Tricarico and his counsel the broker did not provide sufficient documents and information to cover FINRA’s requests. Accordingly, FINRA imposed a bar from the securities industry.

shutterstock_102242143As we previously reported, The Financial Industry Regulatory Authority (FINRA) sanctioned and barred financial advisor Matthew Davis (Davis) concerning allegations of misconduct in several customer accounts. Davis was associated with Beneficial Investment Services, Inc. from November 2008, through April 2010. Thereafter, Davis was associated with OneAmerica Securities, Inc. (OneAmerica) from April 2010, through July 2013. The allegations of misconduct included claims of conversion, misrepresentation of customer holdings and account value, forgery, discretionary unauthorized trading, attempts to settle a customer complaint without the firm’s knowledge, and unsuitable investment recommendations.

In a new regulatory action, FINRA alleged that OneAmerica failed to supervise Davis and ignored numerous red flags of misconduct concerning his activities. For instance, FINRA alleged that two customers opened a OneAmerica account with Davis identifying the husband as a 65 years-old and earning between $50,001-75,000 per year. His wife was a “Homemaker” and the couple’s stated Net Worth, excluding their residence, was “$250,001-500,000″ and they had only two years of investment experience limited to stocks, bonds, and mutual funds.

Only three weeks later the couple signed an Option Agreement and were approved to trade options. FINRA found that Davis rapidly traded the options account executing 55 options transactions in May 2012; 52 options transactions in June 2012; and 53 options transactions in July 2012. This activity, according to FINRA, caused a rapid loss of account equity. FINRA found that there were multiple red flags that should have alerted the OneAmerica’s compliance department that Davis’ recommendations were unsuitable. For example, FINRA found that the couple’s account agreement reported minimal investing experience but their options agreement identified purported options (and commodities) trading experience. Also the couple’s new account agreement reported their Investment Objective as Long Term Growth but whereas their options agreement stated their objectives included speculation and hedging. Finally, FINRA alleged that the couple’s new account agreement reported their net worth was $250,000-500,000, whereas the options agreement stated their Net Worth was $640,000.

shutterstock_186772637The Financial Industry Regulatory Authority (FINRA) recently barred Ameriprise Financial Services (Ameriprise) broker Jeffrey Davis (Davis) concerning allegations that the broker committed securities fraud by converting client funds. FINRA alleged that from May 2012, through June 2013, Davis converted $116,976 from five Ameriprise customers for his personal use and benefit. According to FINRA, Davis initiated 71 unauthorized electronic Automated Clearing House (ACH) payments from the customers’ brokerage accounts to personal credit card accounts held in Davis’ name. FINRA found that these transfers converted customer funds and violated FINRA Rules 2150 and 2010.

Davis entered the securities industry in June 1998. Davis became associated with Ameriprise in September 2000 and remained with the firm until he was terminated on July 19, 2013. In a Form U5 Uniform Termination Notice dated July 24, 2013, Ameriprise reported that Davis was terminated for misappropriating customer funds to ‘pay personal credit cards.

FINRA Rule 2150(a) prohibits members or person associated with a member from making improper use of a customer’s funds. Improper use of customer funds constitutes conversion of the client’s funds when there is an intentional and unauthorized taking of or exercise of ownership by one who neither owns the property nor is entitled to possess it.

The Financial Industry Regulatory Authority (FINRA) has permanently barred broker Mark Christopher Hotton (Hotton) alleging that the broker engaged in numerous and repeated frauds including forgery, falsification of documents, conversion, misuse of funds, manipulating account records, churning, unauthorized trading, false testimony, and providing false information and documents to FINRA.

FINRA alleged that starting from at least 2006, Hotton engaged in numerous fraudulent investment schemes to steal at least $5,932,000 from his brokerage customers.  FINRA admitted that due to the complexity of the fraud that it had not been able to track down Hotton’s entire use and receipt of ill-gotten funds.  According to FINRA, Hotton converted funds from his customers by using his control over the bank accounts of various corporate entities to divert funds that his customers believed were being invested in legitimate businesses.

Fom November 2002 until November 2005, Hotton was associated with Ladenburg, Thalmann & Co., Inc., From November 2005 until February 2009, Hotton was associated with Oppenheimer & Co., Inc. (Oppenheimer).  While at Oppenheimer, Hotton focused on clients with an average net worth of between $1,000,000 and $20,000,000.  Thereafter, Hotton was a registered representative of American Capital Partners, LLC until August 2010.  From September 2010 until March 2012, Hotton was associated with Alexander Capital, L.P.  Finally, from February 2012 until May 2012, Hutton was associated with Obsidian Financial Group, LLC.  Obsidian terminated Hotton’s registration on May 31, 2012.

The Financial Industry Regulatory Authority (FINRA) has barred Ralph Saviano (Saviano) from the securities industry after the broker failed to respond to FINRA’s requests for information and an interview concerning unreported tax liens, a civil judgment, and a customer complaint involving the misuse of funds.

During a routine investigation of Centaurus, FINRA discovered information regarding certain undisclosed liens, judgments, and possible customer loans.  Thereafter, in June 2012, Centaurus filed a regulatory tip disclosing that a customer had provided Saviano with a cashier’s check for approximately $66,000 that was made payable to Saviano.  Saviano’s transactions with the customer concerned a possible misuse or conversion of funds.

Saviano has been associated with several brokerage firms in the past decade.  Until 2004 Saviano was a registered representative of Royal Alliance Associates, Inc.  From April 2004 until December 2006, Saviano was associated with USAllianz Securities, Inc.  Thereafter, from December 2006 until July 2007, Saviano was a registered representative of Questar Capital Corporation.  Finally, Saviano was registered with Centaurus Financial, Inc. (Centaurus) until his termination in June 2012.  According to Saviano’s FINRA disclosure records he is also the president of Saviano Financial Group.

James R. Glover reached a settlement with the Financial Industry Regulatory Authority (FINRA) resulting in a permanent bar from the securities industry.  Glover failed to appear and participate in FINRA’s investigation of his securities activities.

The FINRA complaint alleges that while Glover was employed by Signator Investors, Inc. (Signator), Glover misappropriated customer funds and sold unregistered securities products in violation of the securities laws.

From 1998 through May 2012, Glover was associated with Signtor.  During this time, it has been alleged that Glover sold interests in private placements, limited liability companies, and real estate related ventures.  Glover’s CRD lists that Glover is also employed by GW Financial Group, Inc.  In addition to FINRA’s sanctions against Glover, at least 25 customer complaints have been filed against Signator for the firm’s failure to supervise Glover’s business activities.  Nearly all of the customer complaints accuse Glover of selling fraudulent real estate related securities and of mishandling the customer’s accounts.

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