Articles Tagged with Independent Financial Group

shutterstock_113632177-300x249According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Robert Jamison (Jamison), formerly associated with PNC Investments, in December 2018, was sanctioned and barred from the securities industry by FINRA over accusations of potentially selling unapproved products.

In December 2018 FINRA alleged that Jamison consented to the sanction and to the entry of findings that he refused to provide testimony to FINRA related to allegations that he, in connection with private securities transactions, referred customers to an individual who was not registered and who may have recommended or sold unsuitable securities to those customers.

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 is unclear the nature and scope of Jamison’s activities.  Jamison’s disclosures include any outside business activities (OBAs) disclosures.  The only disclosure is an involvement with Crump Life Insurance.

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shutterstock_62862913-259x300Advisor Wenjinn Chang (Chang), currently employed by Independent Financial Group, LLC (Independent Financial) has been subject to at least two customer complaints.  According to a BrokerCheck report 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 October 2018 a customer filed a complaint alleging that Chang violated the securities laws by alleging over-concentration of non-traded REITs that were not suitable and that resulted in losses. The claim alleged $50,000 in damages and the claim is currently pending.

In September 2018 a customer filed a complaint alleging that Chang violated the securities laws by Alleging that the broker failed to advise of the risks of the investments made and that the Claimant has suffered losses as a result of the investments made.  The claim alleged $75,000 in damages and the claim settled for $10,000.

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shutterstock_123928846-300x268According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Jon Pariser (Pariser), formerly associated with Independent Financial Group, LLC (Independent Financial) in Pacific Grove, California was sanctioned by FINRA resulting in a bar from the industry.  In October 2018 Pariser consented to the FINRA sanction and an entry of findings that he failed to provide FINRA with requested documents and information related to allegations that he referred some of his customers to an individual who was not registered and who may have recommended or sold potentially unsuitable securities to them.

It is believed that Pariser recommended that his clients invest with Christopher Parris, an unlicensed broker.  At that time Parris has been accused by the SEC of running an investment fraud scheme through First Nationle Solution.  According to an Securities and Exchange Commission (SEC) complaint filed in June 2018, Parris and others orchestrated the First Nationle Solution Ponzi scheme and bilked investors out of over $102 million.  Parris and others have been accused of using brokers like Pariser to liquidate safe or non-fraudulent investments in order to obtain financing of their scheme.

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According to BrokerCshutterstock_180968000-300x200heck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Jeffrey Schwebach (Schwebach), formerly associated with Independent Financial Group, LLC (Independent Financial) in Dell Rapids, South Dakota was terminated by the firm.  In June 2018 Schwebach was discharged after the firm claimed that he failed to accurately describe the nature of his outside business activities (OBAs) and also violated firm policy with regard to disclosure of customer complaint.  There are no other public disclosures on Schwebach’s record.

At this time it is unclear the nature or scope of the alleged OBAs and if such activity included private securities transactions.  Schwebach’s public disclosures show that he has disclosed numerous OBAs including The Cartwright Bros, a landlord rental business, 50% owner of Schwebach Financial – a d/b/a company.  In addition, Schwebach has disclosed he is a radio DJ for Backyard Broadcasting, 50% owner of Dells Mini Storage, 20% owner of Schwebach Family Partnership, and instructor for a retirement course, board member of Planning Life, and a radio DJ ofr Midwest Communications, among other disclosures.

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shutterstock_113872627-300x300Former Sandlapper Securities, LLC (Sandlapper) and Independent Financial Group, LLC (Independent Financial) broker Kyusun “Kenny” Kim (Kim) has been subject to at least 23 customer complaints and one regulatory action.  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 June 2018 FINRA barred Kim from the securities industry after making findings of unsuitable recommendations to numerous senior customers to concentrate their retirement assets and liquid net worth in speculative and illiquid securities.  FINRA found that Kim recommended customers to invest in speculative and illiquid investments that were inconsistent with the customers’ moderate or conservative investment objectives and risk tolerances. FINRA found that these recommendations caused Kim’s customers to have an undue concentration of the customers’ retirement assets and liquid net worth in speculative and illiquid investments. FINRA also found that Kim falsified client information on important forms by entering inaccurate and inflated net worth, liquid net worth, and investment experience figures for certain customers so that they appeared eligible to purchase speculative investments.

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shutterstock_70999552-300x200The investment attorneys at Gana Weinstein LLP are investigating claims against broker Lyle Boudreaux (Boudreaux). According to BrokerCheck records, Boudreaux has received three customer complaints. Additionally, Boudreaux was terminated from Merrill Lynch in 2012.

In October 2017, a customer allegedly suffered losses in an advisory account due to an allegedly inappropriate investment.

In April 2017, a customer alleged breach of contract, violation of state securities laws, and negligence. The customer is seeking $100,000 in this pending dispute.

shutterstock_80511298-300x218Current Independent Financial Group, LLC (Independent Financial) broker Gerhard Heuer (Heuer) has been subject to six customer complaints – many of which concern suitability concerns over recommendations for Variable Universal Life (VUL) policies.  The securities lawyers of Gana Weinstein LLP are investigating the customer complaints against Heuer.

In April 2017 a customer complained that he was told that his VUL would remain active with the currently scheduled monthly premiums and requested $43,000 in damages.  The claim was settled.

VUL are complex insurance and investment products that investors must fully understand the risks and benefits of prior to investing.  One feature of a VUL policy is that the owner can allocate a portion of his premium payments to a separate sub-account that can be used to grow in value through investments.  Monthly charges for the life insurance policy, including a cost of insurance charge and administrative fees, are deducted from the policy’s cash value.  The cash value of the policy may increase or decrease based on the performance of the sub-account investments.  In addition, the VUL policy terminates, or lapses, if at any time the net cash surrender value is insufficient to pay the monthly cost deductions.  Upon termination of the policy, the remaining cash value becomes worthless.

shutterstock_182004416-300x200Broker John Oldham (Oldham) was recently sanctioned by The Financial Industry Regulatory Authority (FINRA) in an enforcement action.  According to the FINRA AWC (Letter of Acceptance, Waiver, and Consent 2015046203101) FINRA found that Oldham consented to sanctions that he shared commissions from the sales of alternative investments with an unregistered entity. According to FINRA, Oldham facilitated the sales of the alternative investments totaling more than $4.8 million to customers referred to him and shared commissions with the unregistered entity in the amount of $240,000 for these transactions.  FINRA found that while Oldham executed subscription agreements on behalf of the third-party, in some instances this representation on those forms were inaccurate because Oldham had not communicated with the customer who had executed the subscription agreement.

The securities lawyers of Gana Weinstein LLP are investigating the regulatory complaint against Oldham.  In addition to the regulatory action, there is one employment termination for cause listed for Oldham alleging possible violation of FINRA Rule 2040.

Our firm often handles cases involving direct participation products (DPPs) and private placements including oil and gas partnerships, non-traded real estate investment trusts (REITs), and other alternative investments.

shutterstock_185219444-300x278Our securities fraud attorneys are investigating a complaint filed by The Financial Industry Regulatory Authority (FINRA) against Brian Egan (Egan) formerly associated with Independent Financial Group LLC (Independent Financial) alleging that the broker failed to disclose his trading activity in client accounts away from the firm.  According to brokercheck records Egan has been subject to one employment termination for cause by Independent Financial in July 2015 for failing disclose personal trading in accounts away from the firm.

In August 2016 FINRA sanctioned Egan alleging that he consented to the entry of findings that Egan maintained and/or held trading authority in a total of 87 brokerage accounts for himself and over 60 customers at another brokerage firm. The customer accounts over which he held trading authority included both Egan’s family members and customers of his CPA business.  FINRA found that Egan did not notify Independent Financial of his involvement in these accounts when he became associated with the firm, or at any other time.  FINRA found that Egan exercised his trading authority in the accounts at the other firm to execute trades and to transfer funds and securities from certain of the customer accounts to his own accounts.

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_180341738Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Michael DiGaetano (DiGaetano) currently associated with Independent Financial Group, LLC (Independent Financial) alleging unsuitable investments, misrepresentations, fraud, negligence, breach of contract, and breach of fiduciary duty among other claims.  According to brokercheck records DiGaetano has been subject to three customer complaints and one regulatory sanction.

In May 2012 FINRA sanctioned DiGaetano alleging that as a supervisor he failed in responsibilities by not taking reasonable action to prevent another broker from committing securities fraud.  (FINRA No. 2009019209202) As part of the claim, FINRA alleged that DiGaetano failed to even contact customers who were subject to fraudulent mutual fund switches and never questioned the broker involved even though the trades were marked as unsolicited.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly.  This obligation includes making only suitable investments for their client.  The suitable analysis has certain requirements that must be met before the recommendation is made.  First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence.  Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors.  Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives.  These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.