investment fraud lawyer

Capitol Securities Broker Ian Greenblatt Sanctioned By Regulator Over Customer Disputes

February 4, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Ian Greenblatt (Greenblatt), currently employed by Capitol Securities Management, Inc. (Capitol Securities) has been subject to at least four customer complaints and one regulatory action. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Greenblatt’s customer complaints allege that Aziz made unsuitable recommendations in a variety of investments.

In September 2018 FINRA brought a regulatory action against Greenblatt where he consented to sanctions and findings that he settled a customer complaint away from his member firm. FINRA found that customers became dissatisfied with the performance of their brokerage account since their account had declined in value by over $170,000. FINRA found that after one of these customers complained verbally to Greenblatt about the losses they incurred Greenblatt did not report customer’s complaint to the firm and instead met with customers at their home to discuss their complaint. At that meeting, FINRA determined that Greenblatt wrote a personal check for $46,000 to the customers’ son in settlement of customers’ complaint.

Advisor Steven Reznik Subject to Numerous Suitability Complaints

January 3, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Steven Reznik (Reznik), formerly employed by Raymond James Financial Services, Inc. (Raymond James) has been subject to twelve customer complaints during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Reznik concern allegations of unsuitable investments and allegations of overconcentration involving equities and options.

In November 2018 a customer complained that Reznik recommended investments that violated the securities laws including suitability, overconcentration, unauthorized trading, negligence, violation of FINRA Rules, breach of contract, negligent supervision, and breach of fiduciary duty from 9/26/16 – 10/31/18. The customer alleges $125,000 in damages and the claim is currently pending.

In September 2017 a customer complained that Reznik recommended investments that violated the securities laws misrepresentations and omissions relating to unauthorized trades, fraud, breach of fiduciary duty, failure to supervise, negligence, gross negligence, negligent retention, negligent misrepresentation, concentration, and respondeat superior liability occurring from 3/25/15 to 9/13/18. The customer claimed $2,000,000 in damages and is currently pending.

Advisor William Hightower Indicted On Charges of Securities Fraud – Investor Recovery Options

December 15, 2018 | by Staff Attorney

According to the Department of Justice (DOJ) William Hightower, a 60-year-old resident of Bellaire was charged with a 13-count indictment charging him with wire fraud, mail fraud and money laundering. The charges claim that he was the president of Hightower Capital Group (HCG) founded it in 2010 and held himself out to be an investment advisor. The charges outline that Hightower took money from clients from 2013-2018 and made false promises as to their investments when in reality he was conducting a Ponzi Scheme.

Hightower would allegedly tell investors their money was being invested in various projects, such as restaurants, movies, insurance contracts. However, DOJ alleges that none of these projects existed and that instead Hightower received more than $10 million from investors and used investor funds to pay earlier investors in a Ponzi Scheme and to pay himself and fund his lifestyle.

The DOJ also charges that Hightower also concealed from his clients that the Financial Industry Regulatory Authority (FINRA) had barred him in October 2015. The DOJ stated that if convicted, Hightower faces up to 20 years in federal prison for each count as well as possible fines.

According to BrokerCheck records kept by FINRA Hightower has six customer complaints – most of which relate to the alleged securities fraud activities.

Former Mutual Securities Advisor Gary Pevey Accused of Selling Unapproved Securities

December 3, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Gary Pevey (Pevey), formerly associated with Mutual Securities, Inc. (Mutual Securities) in Sacramento, California has been accused by his former firm over unapproved securities. In addition, Pevey has one customer complaint on his record.

In February 2018 Mutual Securities terminated Pevey stating that he violated policies concerning private securities transactions.

Thereafter in September 2018 a customer filed a complaint alleging that Pevey engaged in high-risk and fraudulent investments and inadequate supervision causing $171,000 in damages. The claim is currently pending.

At this time it is unclear the nature or scope of the alleged outside business activities (OBAs) and private securities transactions. Pevey’s public disclosures state that the activity was conducted through his Registered Investment Advisory (RIA) firm Wealth Design Group. It is unknown the nature of the transactions from public filings.

Advisor John Schmidt Accused of Stealing Client Funds By SEC

November 27, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor John Schmidt (Schmidt), formerly associated with Wells Fargo Advisors Financial Network, LLC (Wells Fargo) in Dayton, Ohio has been accused by the Securities and Exchange Commission (SEC) of misappropriating over $1.16 million from at least seven clients.

In September 2018 the SEC filed a complaint alleging that for the past 35 years Schmidt has been a registered representative in the brokerage industry. The SEC found that from at least 2003 through 2017, Schmidt betrayed his customers’ trust by perpetrating a classic fraudulent scheme, acting without customer authorization, and repeatedly selling securities belonging to some of his brokerage customers and secretly transferring the sale proceeds to cover shortfalls in the accounts of other customers. The SEC alleged that Schmidt misappropriated over $1.16 million from accounts belonging to seven customers and transferred that cash to at least ten other customers whose accounts were experiencing shortfalls. In addition, the commission found that rather than tell those customers the truth about their dwindling funds, Schmidt sent them fake account statements and falsely assured the customers that their investment returns could fund their withdrawals without jeopardizing their principal. Most of Schmidt’s customers were elderly retirees with little to no financial expertise and several of Schmidt’s victims were suffering from Alzheimer’s disease or other forms of dementia. The SEC claimed that at least five of Schmidt’s victims passed away during the course of his fraud. Further, Schmidt’s allegedly profited from the scheme and received over $230,000 in commissions from customers who were either the source of, or recipient of, misappropriated funds.

Did A Aegis Capital Broker Recommend Biotech Stock Akers Biosciences?

November 27, 2018 | by Staff Attorney

Biotech company Akers Bioscience (AKER) went public in 2014 using Aegis Financial as its investment underwriter. The company’s IPO price was $5 but has subsequently fallen to only $.25. According to SeekingAlpha not only did Aegis underwrite the security but it also promoted it to investors and potentially the firm’s own brokerage clients buy maintaining a buy rating on the stock. Akers was given an $11.00 price target in June 2014.

The company has also been subject to a recent class action complaint. The complaint alleges that the company made materially false and misleading statements regarding the Akers’ business, operational and compliance policies.

According to the company’s website, Akers Biosciences, Inc. (aka Akers Bio) was founded in 1989, with the objective of developing proprietary, in vitro diagnostic technologies that accelerate the rate at which clinicians, and in some cases consumers, can obtain health information. The tests are designed to provide the same level of accuracy as traditional laboratory testing methods but at a fraction of the cost and turn-around time.

Advisor Floyd Powell Accused of Selling Fraudulent Securities

November 18, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Floyd Powell (Powell), formerly associated with MML Investors Services, LLC (MML Investors) in Albertville, Alabama has been accused by at least four clients of selling fraudulent investments.

In October 2018 a customer filed a complaint alleging that Powell, beginning in or around 2016, recommended that they invest in unregistered and fraudulent investment programs, made false representations, and failed to disclose material facts about the investments. The customer alleged over $3.1 million in damages. The claim is currently pending.

Also in October 2018 another customer filed a complaint alleging that Powell made inappropriate and unsuitable investment recommendations to and transactions beginning in early 2017. The claim is currently pending.

In August 2018 another client alleged violations of securities law regarding Powell’s recommendation to invest in unregistered and fraudulent investment program in July 2016. The claim alleges $250,000 in damages and is currently pending.

At this time it is unclear the nature or scope of the alleged outside business activities (OBAs) and private securities transactions. Powell’s public disclosures only state that he operates his business through a DBA called Faithway Financial Solutions LLC.

Ameriprise Advisor Eric Stuckey Subject to Multiple Complaints Over Unsuitable Investments

November 9, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Eric Stuckey (Stuckey), currently employed by Ameriprise Financial Services, Inc. (Ameriprise) has been subject to five customer complaints and two liens. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of a Stuckey’s customer complaints allege that Stuckey made unsuitable recommendations in different investments including variable annuities and energy stocks.

In May 2018 a customer alleged the broker recommended unsuitable investments, misrepresented features of the investments and failed to disclose risks in the investments causing $220,000 in damages. The claim is currently pending.

In January 2018 a customer alleged that the broker placed them in high risk funds which are not suitable causing $79,000 in damages. The claim was settled for $25,000.

Advisor Mitchell Kurtz Termnated Over Unapproved Product Sales and Ethical Violations

November 8, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Mitchell Kurtz (Kurtz), formerly associated with Henley & Company LLC (Henley & Company) in Roslyn Heights, New York was terminated by the firm. In July 2017 Kurtz was discharged after the firm claimed that based discussions with Kurtz and the SEC Auditors that it is necessary to terminate Kurtz’s registrations with Henley & Company due to violations of both FINRA and SEC rules and firm policies and procedures regarding outside business activities (OBAs), selling away, fiduciary duty obligations, violation of professional standards and the firm’s Code of Ethics.

In addition in August 2012 FINRA brought a regulatory action against Kurtz for altering certain account records. In December 2009 Kurtz was terminated by his prior employer Raymond James Financial Services, Inc. (Raymond James) for altering documents.

At this time it is unclear the nature or scope of the alleged OBAs and private securities transactions that Kurtz may have been involved in.

Hilltop Securities Advisor Walter Valenzuela Subject to Multiple Customer Complaints

October 10, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Walter Valenzuela (Valenzuela), currently employed by Hilltop Securities Inc. (Hilltop Securities) has been subject to at least seven customer complaint. According to records kept by The Financial Industry Regulatory Authority (FINRA), many of the complaints against Valenzuela concern excessive trading of unit investment trust (UITs) securities.

In July 2018 a customer complained that Valenzuela engaged in unsuitable recommendations, misrepresentation, and excessive trading involving UITs causing $3 million in damages. The claim is currently pending.

In August 2017 a customer complained of unsuitable recommendations, unsuitable use of margin, churning, financial exploitation, elder abuse and excessive mark-up/mark-down with respect to municipal bond and UIT trades executed in the account. The complaint also alleged that the representative failed to obtain proper breakpoint discounts for UIT purchases. The customer alleges $9.5 million in damages and the claim is currently pending