investment fraud attorney

Advisor Thomas Martin Has Unsuitable Investment Complaints

October 2, 2022 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Thomas S. Martin (Martin), currently employed by Brighton Securities Corp. (Brighton Securities) has been subject to at least two customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Mr. Martin’s customer complaints alleges that Mr. Martin recommended unsuitable investments in various investments securities, among other allegations of misconduct relating to the handling of their accounts.

In January 2020, Mr. Martin was the subject of a regulatory action initiated by FINRA. Mr. Martin consented to the findings and sanctions, of $5,000 in civil and administrative penalties. Mr. Martin neither admitted or denied the findings. Mr. Martin allegedly exercised discretion in customers’ accounts, without prior written authorization from the customers. Additionally, Mr. Martin received written reprimands from his firm, for engaging in such conduct.

In August 2017, a customer complained that Mr. Martin violated the securities laws by alleging that Mr. Martin engaged in unauthorized trading between February 2017 and July 2017. The claim settled in the amount of $8,252.75.

In August 2011, a customer complained that Mr. Martin violated the securities laws by alleging that Mr. Martin engaged in unsuitable investment advice, with regards to the customer’s IRA. Client claimed she deposited money into her IRA with instructions to be placed in the safest account. The IRA is alleged to have lost approximately $7,000, resulting in this customer dispute. The claim settled in the amount of $22,407.33.

Broker Siddharth Reddy Has Unsuitable Investor Complaints

October 26, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Siddharth Reddy (Reddy), recently employed by Paulson Investment Company LLC (Paulson Investment Company) has been subject to at least three customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Mr. Reddy’s customer complaints alleges that Mr. Reddy recommended unsuitable investments in various investments, among other allegations of misconduct relating to the handling of their accounts. Mr. Reddy is no longer registered as a broker.

In September 2013, a customer complained that Mr. Reddy violated the securities laws by alleging that Mr. Reddy engaged in unsuitable investment advice. The claim settled in the amount of $200,000.

In September 2013, a customer complained that Mr. Reddy violated the securities laws by alleging that Mr. Reddy engaged in unsuitable investment advice, breach of fiduciary duty, breach of contract, and material misrepresentations. The claim settled in the amount of $55,000.

In September 2012, a customer complained that Mr. Reddy violated the securities laws by alleging that Mr. Reddy engaged in unsuitable investment advice, breach of fiduciary duty, breach of contract, and material misrepresentations. The claim settled in the amount of $150,000.

Financial Advisor Gregory Williams Subject to Nine Investment Complaints

September 21, 2021 | by Staff Attorney

Advisor Gregory Williams (Williams), formerly employed by brokerage firm Forta Financial Group, Inc. (Forta Financial) has been subject to at least nine customer complaints. According to a BrokerCheck report several of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. 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 April 2021 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2013 and February 2021. The claim involves alternative investments and alleges $30,000 in damages and is currently pending.

In October 2020 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2014 and September 2020. The claim involves alternative investments and alleges $250,000 in damages and is currently pending.

In October 2020 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws likely between March 2012 and September 2020. The claim involves alternative investments and alleges $99,000 in damages and is currently pending.

Seth Stewart Has Customer Complaints Over Alternative Investments

September 20, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Seth Stewart, currently employed by Brookstone Financial and formerly employed by Center Street Securities, Inc. (Center Street), has been subject to at least two customer complaints during his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Stewart’s customer complaints allege that Stewart recommended unsuitable investments in illiquid alternative investments – a high risk investment category.

In February 2020, a customer complained that Stewart violated the securities laws by alleging that Stewart engaged in unsuitable investment advice. The claim alleges $200,000 in damages and is currently pending.

In December 2019, a customer complained that Stewart violated the securities laws by alleging that Stewart was unaware that certain investments he made were illiquid. The claim alleges $100,000 in damages and is currently pending.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors.

Advisor Kevin Meadows Accused of Excessive Trading and Unsuitable Investment Advice

September 14, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that broker Kevin Meadows (Meadows), most recently associated with IBN Financial Services, Inc. (IBN Financial Services) has been subject to at least five customer complaints and two regulatory actions during the course of his career. Meadows has been recently barred by FINRA from acting as a broker. According to records kept by The Financial Industry Regulatory Authority (FINRA), Meadows’s customer complaints alleges that Meadows recommended unsuitable investments in various investments among other allegations of misconduct relating to the handling of their accounts, including churning customer accounts.

In April 2020, a customer complained that Meadows violated the securities laws by alleging that Meadows recommended unsuitable investments and failed to repay a loan. Further, the claim alleged that Meadows engaged in failure to supervise, excessive trading, and breach of fiduciary duty. The damage amount requested was $168,000. The claim settled in the amount of $35,000.

In March 2006, a customer complained that Meadows violated the securities laws by alleging that Meadows engaged in unauthorized trading and use of margin in customer accounts. The damage amount requested was $135,481.71. The matter was settled in a voluntary mediation, without going through arbitration/litigation. The claim settled in the amount of $50,000.

Advisor John Howard Has Unsuitable Investment Complaints

September 12, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that advisor John Howard (Howard), currently employed by Raymond James & Associates, Inc. (Raymond James) has been subject to at least three customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Howard’s customer complaints alleges that Howard recommended unsuitable investments in various investments including allegations involving unauthorized trading among other allegations of misconduct relating to the handling of their accounts.

In September 2019, a customer complained that Howard violated the securities laws by alleging that Howard engaged in breach of fiduciary duty, negligence, breach of contract, and violated several other securities laws. The claim settled in the amount of $97,500.

In March 2008, a customer complained that Howard violated the securities laws by alleging that Howard engaged in unauthorized purchase of commercial paper. The claim settled in the amount of $1,134,601.00.

In February 2005, a customer complained that Howard violated the securities laws by alleging that Howard conducted unauthorized trades. The claim alleges settled in the amount of $7,859.83.

Adviser Ezri Shechter Alleged of Churning and Sanctioned by Regulator

April 13, 2021 | by Staff Attorney

Adviser, Ezri Shechter, was previously employed at Spencer-Winston Securities Corporation. (Spencer-Winston), has been subject to at least five customer complaints over the course of his career with these claims alleging violations such as suitability, churning, and unauthorized trading. Most notably, Ezri has been suspended and fined by the Financial Industry Regulatory Authority (FINRA) for unauthorized trading activity.

Since May 2000 through December 2010, there have been three customer complaints against Shechter which cumulatively settled for over $170,000. Additionally, there have also been allegations of unauthorized trading against Shechter. The most recent unauthorized trading allegation occurred in June 2020 and sought damages of $25,000. Shechter’s unauthorized trading activity resulted in a three-month suspension and $12,500 fine by FINRA.

According to a BrokerCheck report, Shechter consented to “[causing] multiple customers of his member firm to sign blank or incomplete discretionary trading forms that he then copied and used to complete discretionary trading forms. The findings stated that Shechter submitted the forms with the photocopied signatures to his firm as originals, causing the firm to make and keep inaccurate books and records regarding the granting of discretionary authority.”

Adviser Michael Greenstone Accused of Making Unsuitable Investment Recommendations

April 10, 2021 | by Staff Attorney

Adviser Michael Greenstone (Greenstone), currently employed at Merrill, Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), has been subject to at least nine customer complaints during the course of his career. Eight of the nine complaints against Greenstone allege unsuitability. In addition, Greenstone recently had nine customer complaints expunged in mass from his record using FINRA’s notoriously flawed expungement process. According to the PIABA Foundation, 1,078 expungement-only cases have been filed from 2015 to 2018. The study concluded that “The Finra [expungement] process is being systematically gamed, exploited and abused with one-sided hearings, manipulation of arbitrator selection, deletion of significant customer complaints and abusive (and possibly fraudulent) conduct to such an extent that it must be frozen until it can be repaired.”

According to a BrokerCheck report, there have been two complaints against Greenstone in the past two years alleging him of making unsuitable investment recommendations. The most recent allegation against Greenstone is pending and the customer is seeking $5 million in damages for unsuitable investment recommendations made from 2013 through 2019. Over the course of Greenstone’s career, several customers have accused him of making unsuitable investment recommendations. The aggregate settlement amount for his collective complaints is in excess of $240,000.00. Greenstones two largest reported settlements occurred in 2009 and in 1999. In July 2009, a customer alleged Greenstone placed her in a portfolio that was not suitable for her risk tolerance and age. This matter settled for approximately $114,000.00. Moreover, in July 1999, accused Greenstone of excessive and unsuitable trading. This matter settled for $106,000.00.

Advisor James G. Babineaux Accused of Making Unsuitable Investment Recommendations and Unauthorized Trading

April 10, 2021 | by Staff Attorney

Advisor James Babineaux (Babineaux), currently employed by Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch) has been subject to at least two customer complaints during the course of his career. According to a BrokerCheck report the customer complaints concern unsuitable investment recommendations and unauthorized trading. In August 2018, a customer alleged Babineux engaged in unauthorized trading from July 26, 2018 through July 27, 2018. Additionally, that same year, another customer alleged that Babineux engaged in unsuitable investment recommendations and unauthorized trading from January 18, 2018 through July 27, 2018. Both matters settled for $1,322.21 and $2,853.93 respectively.

Unauthorized trading occurs when a broker sells securities without the prior consent from the investor. All brokers, who do not have discretionary authority to trade an account, are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). Under the NASD Conduct Rule 2510(b), a broker is prohibited from trading in a non-discretionary customer account without prior written authorization from the customer. Unauthorized trading is a type of investment fraud because the Securities Exchange Commission (SEC) has found that disclosures of trades being made are essential and material to an investor. Unauthorized trading is often a gateway violation to other securities violations including churning, unsuitable investments, and excessive use of margin.

Adviser Stuart Henley Sanctioned by Regulator Over Trading Activity

April 9, 2021 | by Staff Attorney

Adviser Stuart Henley, previously employed at Calton and Associates, Inc. (Calton), has been subject to a customer complaint, discharged for his handling of client accounts, and was suspended and fined by the Financial Industry Regulatory Authority (FINRA). Additionally, Henley has also been subject to a tax lien. His most recent customer complaint alleges churning, excessive trading, and unsuitable trading.

According to a BrokerCheck report, in September 2016, a customer alleged that Henley excessively traded their account to gain commission. The matter was settled for $800,000. Moreover, in March 2018, Morgan Stanley discharged Henley for engaging in unauthorized trading. Thereafter, FINRA sanctioned Henley and he consented to findings that he exercised discretion in an elderly customer’s account without receiving acceptance of the account as discretionary by his member firm. Further, FINRA stated that although Henley had been given express or implied authority to exercise discretion in the account, the customer did not provide written authorization for Henley to exercise discretion. Moreover, according to FINRA Henley provided inaccurate responses on annual compliance questionnaires submitted to the firm by falsely indicating that he not exercised discretion in any customer account.