Articles Tagged with Investment Attorney

shutterstock_175483226-300x300Are you hiring the best securities attorney to help you recover investment losses? This article will help you make the right choice when selecting the best FINRA attorney by outlining the most important things to look out for. Consider these five questions to ensure you are hiring the best:

  1. Is the attorney reputable?

It is imperative to hire a reputable attorney for FINRA arbitration who has the necessary educational background, training, and results-oriented experience.  To ensure you are hiring the best securities attorney, look at the attorney’s practice areas, case experience, and client reviews.

shutterstock_163885049-300x200The fiduciary rule passed during the Obama administration is being reviewed by the Department of Labor (DOL), leaving plenty of uncertainty for advisers and investors. As Barry Tempkin reports, “During this period, advisers who do not receive level-fee compensation are held to the DOL impartial conduct standard for retirement accounts, but are not required to enter into best interest contracts for commission-based compensation.” Under the DOL impartial conduct standard, brokers who offer retirement investing advice are required to put clients’ interests ahead of their own. Although portions of the rule went into effect in June, there are additional requirements but the DOL has proposed a delay to fully implementing the rule until July 2019.

We cannot be sure how the current DOL under Secretary Acosta will ultimately handle the adoption of a fiduciary standard. In the meantime, the impartial conduct standard for retirement accounts will likely result in more litigation and arbitration. Since the rule benefits investors, there will likely be a higher success rate for investors’ representatives.

Under the new fiduciary rule, if an adviser engages in a BIC (“Best Interests Contract”) agreement with a client, it allows the adviser to engage in transactions that are prohibited under the rule. If the “Best Interests Contract” (BIC) exception goes into effect, these claims will include breach of contract.

shutterstock_164637593-300x199The investment lawyers of Gana LLP are investigating regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Christopher Stephen Jorgensen (Jorgensen). Jorgensen allegedly refused to appear for on-the-record testimony requested by FINRA resulting in a ban from the securities industry.

In April 2017, Jorgensen was terminated from his position at Summit Brokerage Services after “the firm received a verbal complaint from a customer who alleged that [he] instructed her not to respond to a FINRA inquiry.”

In 2012, he was terminated from his position at Raymond James Financial Services “due to client complaint and settlement relating to unauthorized discretion.”

shutterstock_1832893-226x300The investment lawyers of Gana LLP are investigating claims against Dennis Rasmusson (Rasmusson). According to BrokerCheck records, Rasmusson has been subject to two customer disputes and regulatory action.

In 2014, a customer alleged that Rasmusson failed to follow instructions, traded excessively and breached his fiduciary duty. The damage amount requested was $500,000 and this dispute settled for $110,000. In 2013, a customer alleged mismanagement of portfolio. This dispute was settled for $34,000.

In 2011 the state of Nebraska sanctioned Rasmusson for failing to keep certain books and records and maintain policies and procedures manual.

shutterstock_189322280-300x234According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Patrick Hudson (Hudson), in June 2015, was terminated by his then employer RBC Capital Markets (RBC).  RBC stated that Hudson was terminated due to undisclosed outside business activities and the sale of unapproved products.

Thereafter, in August 2017, FINRA brought action against Hudson finding that Hudson participated in private securities transactions in the form of promissory notes, without providing written notice or seeking written from RBC. FINRA found that Hudson’s outside real estate business entered into a series of promissory notes away from the firm totaling $490,000. In addition, Hudson participated in multiple outside businesses without providing prior written notice to the firm.  FINRA determined that on at least 21 occasions Hudson sent letters on firm letterhead to various third-parties for the purpose of verifying the assets of firm customers but that Hudson failed to submit these letters to the firm’s operations support department for supervisory review.

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”.

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shutterstock_34872913-300x209Former Newbridge Securities Corporation (Newbridge) broker Austin Dutton (Dutton) has been subject to two complaints and a recent sanction citing dishonest or unethical practices in the securities business by the Pennsylvania Department of Banking and Securities and fining Dutton $200,000.  According to a BrokerCheck report Dutton recommended the purchase of a security to at least one customer without reasonable grounds to believe that the transaction was suitable for the customer.

In addition, Dutton’s firm, Newbridge, was also sanctioned by the state of Pennsylvania on findings that “From in or about January 2012 until December 2016, Newbridge did not maintain a reasonable system for applying and enforcing written procedures pertaining to their sales of structured products by one agent in Pennsylvania to certain of his clients…”  While The order does not name the broker it appears reasonably related to Dutton.

According to newssources, Dutton is known to have recommended and sold and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs).  In particular Dutton sold real estate investment trusts formerly managed by Nicholas Schorsch’s private firm, American Realty Capital (ARC), now AR Global.  An accounting scandal affected ARC and its REITs.  According to sources, Dutton sold these products to retirees and police officers.

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shutterstock_178801082-300x200In February 2017, broker James Geake (Geake) was subject to a customer complaint alleging $347,083 in damages concerning equity indexed annuities.  The customer alleges that he was sold equity indexed annuities that gave the broker a bonus for signing clients and that it was a bait and switch scheme. The complaint is currently pending.

Geake is currently associated with Madison Avenue Securities, LLC (Madison Avenue).  The law offices of Gana LLP are currently investigating customer complaints concerning this broker.  According BrokerCheck Geake has a total of four customer complaint disclosures including allegations of unsuitable investments in annuities and alternative investments among other claims.

Equity indexed and variable annuities are complex financial and insurance products.  In fact, recently the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing.  Essentially, a variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you.  The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen.  The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

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shutterstock_139932985-300x200The investment lawyers of Gana 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_27597505-300x200According to BrokerCheck records Robert Yahney (Yahney), associated with Merrill Lynch Pierce, Fenner & Smith Incorporated (Merrill Lynch), has been subject to five customer complaints.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Yahney has been accused by customers of unsuitable investment advice and investment strategy and appears to include options recommendations.

The most recent complaint filed in May 2017 alleges $1,000,000 in damages stemming from allegations of unsuitable investment recommendations and misrepresentation from February 2012 to June 2014. The claim is currently pending.  Another claim was filed by a customer in March 2017 alleging unsuitable investment recommendations and misrepresentation from August 2012 to July 2014 causing $300,000 in damages. The claim is currently pending.

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shutterstock_183011084-199x300According to BrokerCheck records Todd Ryman (Ryman), now associated with SunTrust Investment Services, Inc. (SunTrust), has been subject to six customer complaints and one regulatory action in his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Ryman has been accused by customers of unsuitable investment advice in a variety of securities including equities, private equity investment funds, and other types of investment vehicles.  Some customers have also alleged unauthorized trading, misrepresentations and failure to follow instructions, among other claims.

One customer complaint filed in November 2016 alleged an unsuitable investment in a private equity fund resulting in $250,000 in damages.  The claim was settled for $205,193.

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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