Articles Tagged with First Allied Securities

shutterstock_85873471-300x200Advisor Jeffrey Labelle (Labelle), currently employed by Kovack Advisors, Inc. (Kovack Advisors) has been subject to at least six customer complaints and one employment termination for cause during the course of his career.  According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, and private placements.  Labelle discloses that he operates out of a d/b/a called Gulf Coast Wealth Advisors and is also affliated with other businesses including Labelle & Associates and Gulf Coast Insurance Group.  The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In 2007 Labelle was terminated by SII Investments, Inc. for failing to follow the firm’s policies concerning his advertising practices.

In February 2020 a customer complained that Labelle violated the securities laws by alleging that Labelle engaged in sales practice violations related to recommending investments that were not suitable for her. The investor alleges breach of fiduciary duty, breach of contract and negligent supervision. The claim seeks $250,000 in damages and is currently pending.

In February 2020 a customer complained that Labelle violated the securities laws by alleging that Labelle engaged in sales practice violations related to recommending investments that were not suitable for her. Claimant generally alleges unsuitability, breach of fiduciary duty, negligence, breach of contract and failure to supervise. The claim seeks $49,000 in damages and is currently pending.

Continue Reading

shutterstock_93851422-300x240The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Jamie Westenbarger (Westenbarger), formerly employed by Securities America, Inc. (Securities America) has been subject to at least five customer complaints, two employment termination for cause, and one regulatory action during the course of his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Westenbarger’s customer complaint alleges that Westenbarger recommended unsuitable investments in a variety of investment products including alternative investments, non-traded REITs, variable annuities, corporate notes, and UITs among other allegations of misconduct relating to the handling of their accounts.

In August 2019 Westenbarger’s employer, Securities America, discharged Westenbarger alleging that the representative was discharged for violating firm policies and procedures regarding borrowing funds from clients.

Thereafter, FINRA investigated the allegations and in October 2019 barred Westenbarger after alleging that he consented to the sanction and to the entry of findings that he failed to provide documents requested by FINRA during the course of an investigation concerning information disclosed by Securities America. FINRA found that Westenbarger intentionally provided a partial response, but did not substantially comply with all aspects of FINRA’s request.

In October 2019 a customer complained that Westenbarger violated the securities laws by alleging that Westenbarger convinced them to purchase a corporate note and instead used the funds for his own purposes, that in June 2018, Westenbarger convinced them to replace a variable annuity for no apparent reason, and that in July 2019 Westenbarger made an unauthorized purchase of a UIT, which was unsuitable.  The claim alleges $212,000 in damages and is currently pending.

Continue Reading

shutterstock_20354401-300x200According to BrokerCheck records financial advisor Michael Heath (Heath), currently employed by Infinity Financial Services (Infinity Financial) has been subject to one regulatory action, two employment terminations for cause, and one civil lien during his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), the regulatory action against Heath concern allegations of unsupervised record activity.

In October 2018 FINRA alleged that Heath consented to the sanctions and findings that he regularly communicated with his customers through an unapproved personal email account about member firm business and circumvented the firm’s supervision.  FINRA found that in these emails Heath sent account documents, discussed account performances, and discussed specific investments with his customers. FINRA further found that the firm’s supervisory procedures required electronic business-related correspondence to be sent through firm issued or firm approved email accounts so that the firm could monitor such communications for recordkeeping and compliance purposes.  FINRA determined that by using unapproved personal email account Heath caused his firm to fail to maintain all business-related communications.  In addition, FINRA also found that Heath failed to comply with FINRA rules on communications with the public in that he created account performance summaries that he used in meetings with clients that failed to provide a sound basis for customers to evaluate the facts.

In March 2016 Heath was discharged by Securities America, Inc. (Securities America) on allegations that he failed to disclose internal investigation with previous broker dealer on his CRD update.

That disclosure followed Heath’s termination from First Allied Securities, Inc. (First Allied) where the firm terminated him for failing to comply with the firm’s email policies.

Continue Reading

shutterstock_190371500-300x200Advisor Andrew Scheirer (Scheirer), currently employed by Kovack Securities, Inc. (Kovack Securities) has been subject to at least four customer complaints.  According to a BrokerCheck report many of the customer complaints concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In December 2014, Scheirer’s former employer First Allied Securities Inc. (First Allied) terminated Scheirer alleging that he did not follow the firm’s procedures concerning an arbitration that had been filed by a customer.

In May 2018 a customer filed a complaint alleging unsuitable investment recommendations, misrepresentation, breach of contract, breach of fiduciary duty, and negligence.  The claim alleged $100,001 in damages and settled for $40,000.

In March 2016 a customer filed a complaint alleging that in approximately 2007 the broker recommended various unsuitable private equity products. The claim alleged breach of contract, material omission, fraud, unsuitability, control person liability, and failure to supervise.  The claim alleged $200,000 in damages and settled for $30,000.

Continue Reading

shutterstock_184433255-300x228The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Charles Lundell (Lundell).   According to BrokerCheck records, Lundell was suspended by FINRA in November 2017 for executing unauthorized trades in customers’ non-discretionary accounts. In addition, Lundell has been subject to two customer disputes, a regulatory action sanctioned by the New York Stock Exchange (NYSE), and two discharges from member firms.

In November 2017, FINRA found that Lundell violated the NASD Conduct Rule 2510(b) and FINRA Rule 2010 by executing unauthorized transactions in five of his customers’ non-discretionary accounts. From January to February 2017, Lundell exercised discretion of $252,912 of four equity securities in his customers’ accounts and sold $65,788 of one of the equity securities without customer or firm approval. FINRA fined Lundell $5,000 and suspended him for 30 days.

In addition, in March 2017, Lundell was discharged from First Allied Securities, Inc. for violating the firm policy regarding the execution of unauthorized transactions without the firm’s required approval.

shutterstock_159036452-257x300Former First Allied Securities, Inc. (First Allied) broker Sean Brady (Brady) has been subject to at least six customer complaints, one employment termination for cause, and one regulatory action resulting in a bar from the industry.  According to a BrokerCheck report many of the customer complaints concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs).  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In October 2017 First Allied terminated Brady on allegations that he violated the firm’s policies pertaining to client falsification of signature on documents, text messaging, and consolidated account reports.  Thereafter, Brady was subject to a FINRA investigation concerning his sales practices.  FINRA found that Brady failed to provide the regulator with information and documents requested resulting in a automatic industry bar.

The most recent customer complaint alleges Brady misrepresented her net worth, made an unsuitable recommendation, and made misrepresentations and omissions with respect to her investment from 2017 causing $265,000.  The claim is currently pending.

shutterstock_189006551-207x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Masood Azad (Azad), in May 2017, was terminated by his employer First Allied Securities, Inc. (Frist Allied) after the firm alleged that Azad violated firm policy relating to borrowing money from clients, engaging in an unapproved private securities transaction and outside business activity.  Thereafter, FINRA opened an investigation and ultimately barred Azad from the industry.  FINRA found that Azad failed to provide FINRA requested documents and information in connection with its investigation into allegations of misconduct by Azad. FINRA stated that the allegations included that Azad participated in an unapproved private securities transaction by soliciting investments and/or directly investing in an electronic data security company and engaged in outside business activities involving the company without obtaining authorization from the firm.

At this time it is unclear the extent and scope of Azad’s securities violations and outside business activites.  Azad’s CRD lists that he is also an attorney and operates the Law Offices of M.H. Azad.  Azad also lists an insurance business called Consolidated Working Group and operates a d/b/a for his securities business called Robertson Wealth Management.  Finally, Azad lists American Retirement Solutions as another securities related d/b/a outside business activity.  While at this time it is unknown the exact products and services sold away any selling of notes or 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_139932985-300x200The investment lawyers of Gana Weinstein LLP are investigating allegations made by The Financial Industry Regulatory Authority (FINRA) against former First Allied broker John Kai (Kai), working out of Hilo, Hawaii. According to Kai’s file on FINRA’s BrokerCheck, he was suspended in June 2017 for failing “to respond to FINRA requests for information” and was barred from the securities industry on September 12, 2017.

Kai entered the industry in 1991 and worked for Merrill Lynch, Pierce, Fenner & Smith Incorporated until 1995. He then moved to Painewebber Incorporated from 1995 until 1999. From 1999 until 2006, he was with Linsco/Private Ledger Corp. From 2006 until 2010, Kai was with Commonwealth Financial Network. And finally, he was with First Allied Securities, Inc. from 2010 until 2017 when he was terminated.

First Allied terminated John Kai in April for violating “numerous firm policies including communication with the public, undisclosed private securities transactions and outside business activity, borrowing funds from a client, and exercising discretion in clients’ brokerage accounts without the firm’s approval.”

shutterstock_114128113-300x238According to BrokerCheck records The Financial Industry Regulatory Authority (FINRA) has filed a complaint against Dennis Mehringer (Mehringer) over allegations that Mehringer made unsuitable recommendations that caused a customer to engage in excessively expensive short-term trading of mutual fund Class A shares. According to FINRA, Mehringer repeatedly recommended, and caused the customer to engage in, short-term purchases and sales of 84 mutual fund Class A positions in five of the customer’s accounts. FINRA alleged that in 47 of the 84 purchase transactions, the customer paid front-end sales loads ranging from four to five percent and that all but 17 of these 84 mutual fund positions were held for less than six months while 35 of them were held for less than three months. FINRA found that Mehringer received $169,735 in commissions from the transactions and that the trades were without reasonable grounds to believe that the recommendations were suitable for the customer in light of the frequency and nature of the transactions based on the customer’s investment objectives.

Class A mutual fund share investments are long-term trades that come with significant sales loads.  Frequent trading and switching between the mutual funds and mutual fund families is unsuitable for any customer.

Mehringer is currently associated with Western International Securities, Inc. (Western International) and has been subject to nine customer complaints alleging unsuitable investments, overconcentration, excessive commission charges among other claims.  The securities lawyers of Gana Weinstein LLP continue to investigate the customer complaints against Mehringer.

shutterstock_94127350The Financial Industry Regulatory Authority (FINRA) announced that it has fined eight brokerage a total of $6.2 million for failing to supervise sales of variable annuities (VAs).  Five of the firms were required to pay more than $6 million to customers who purchased L-share variable annuities that came with potentially incompatible, complex and expensive long-term minimum-income and withdrawal riders.

FINRA’s enforcement actions were against the following firms.

  • VOYA Financial Advisors Inc. – fined $2.75 million.
Contact Information