JHS Capital Advisors

Financial Advisor Rabinder “Ravi” Deshmukh Has Customer Complaints

October 4, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Rabinder “Ravi” Deshmukh (Deshmukh). According to BrokerCheck records Deshmukh has been subject to at least four customer complaints. The customer complaints against Deshmukh allege securities law violations that including unsuitable investments and excessive margin among other claims.

The most recent claim was filed in June March 2016 and alleges that from 2008 to 2015, the customer was recommended and sold unsuitable, highly concentrated positions in speculative securities. In addition, the customer also alleged that they were recommended to trade on margin and seek compensatory and punitive damages in the amount of $9 million. The complaint is currently pending.

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.

Broker Investigation: Aegis Capital Financial Advisor Michael McDonald

November 2, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Michael McDonald (McDonald) has been the subject of at least 5 customer complaints. Customers have filed complaints against McDonald alleging securities law violations including claims of churning and excessive trading, unsuitable investments, excessive commissions, unauthorized trading, breach of fiduciary duty, and fraud among other claims. In 2011, a customer complained that McDonald recommended a private placement leading to $450,000 in damages. In 2008, another customer also complained that McDonald recommended a private placement called Xyience, Inc which caused $450,000 in damages.

McDonald entered the securities industry in 1993. From November 2005, until February 2011, McDonald was registered with JHS Capital Advisors, Inc. Since February 2011, McDonald has been associated with Aegis Capital Corp. out of the firm’s Maitland Florida office location.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.

Broker Investigation: Claims Against Broker John Stapleton

November 2, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker John Stapleton (Stapleton) has been the subject of at least 2 customer complaints, 1 regulatory action, and 6 judgements or liens. Customers have filed complaints against Stapleton alleging securities law violations including misrepresentations of investments among other claims.

In 2005 the NASD brought action against Stapleton alleging that the broker committed securities fraud and made unsuitable investments while exercising control over the purchases and sales in a client’s account. The NASD found that Stapleton did not have a reasonable basis to believe that the purchases and sales in the account were suitable for the customer given the size and frequency of the transactions and the customer’s circumstances.

In addition, Stapleton has had difficulty managing his own finances and on April 16, 2014, disclosed a tax lien of $105,7191, on December 6, 2013, disclosed a tax lien of $12,478, on April 23, 2012, disclosed a tax lien of $1,592, on January 25, 2012, disclosed a tax lien of $9,642, on August 10, 2010, disclosed a tax lien of $121,506, and on March 27, 2009, disclosed a tax lien of $11,180. Judgements are often a sign that the broker cannot manage their own personal finances and may be tempted to recommend high commission products or strategies to clients in order to satisfy debts.

FINRA Investigates Broker Craig Taddonio Over Supervision and Churning

October 29, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Craig Taddonio (Taddonio) has been the subject of at least three customer complaints, three judgements or liens, and one regulatory investigation. The Customer complaints against Taddonio alleges securities law violations that claim churning and excessive trading, unsuitable investments, securities fraud, and excessive commissions among other claims. The most recent complaint filed in April 2015, alleges losses of $900,000. In addition, in May 2015, a customer was awarded $338,454 in an arbitration claim including Taddonio where the panel assessed $107,944, $9,871, and $220,639 in compensatory damages against Taddonio and others jointly and severally and also a finding of punitive damages against Taddonio and others jointly and severally under New York law.

In addition to customer complaints Porges is subject to several liens including a massive $574,055 tax lien in February 2015, a $57,735 tax lien in September 2014, and a $48,607 tax lien in September 2014. Tax liens and judgements are often a sign that the broker cannot manage their own personal finances and may be tempted to recommend high commission products or strategies to clients in order to satisfy debts.

Finally, the brokercheck record also states that on September 29, 2015, FINRA initiated an investigation into Taddonio conduct. The investigation relates to false statements and testimony, violations of FINRA’s supervisory rules and churning.

Broker Investigation: Aegis Capital Financial Advisor Edward Jeffery

October 18, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Edward Jeffery (Jeffery) has been the subject of one customer complaint and one regulatory action. The Customers complaint against Jeffery alleges securities law violations that focus primarily on churning and excessive trading. In addition to the churning claims, the customer have complained of unauthorized trading among other claims. In the regulatory action, FINRA alleged that from July 2004 through November 2007, Jeffery effected 682 discretionary transactions in a customer’s accounts without written discretionary authority and without having the customer’s accounts accepted as discretionary accounts in violation of NASD rules. As a result Jeffery was suspended for thirty days and a fine of $10,000.

Jeffery entered the securities industry in 1992 with Paulson Investment Company, Inc until April 2012. Thereafter, from Apirl 2012 until July 2015, Jeffery was a registered representative of JHS Capital Advisors, LLC. Finally, since July 2015, Jeffery has been associated with Aegis Capital Corp. where he remains registered out of the Portland, Oregon office location.

Churning is investment trading activity in the client’s account that serves no reasonable purpose for the investor and is transacted solely to profit the broker. The elements to establish a churning claim, which is considered a species of securities fraud, are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

JHS Capital Advisors Broker Mark Weindling Barred Over Forging Signatures in Deceased Customer’s Account

June 19, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) recently barred broker Mark Weindling (Weindling) concerning allegations that Weindling failed to respond to the regulator’s requests to provide information and documents concerning the an investigation into claims that Weindling effected transactions within the account of a deceased customer.

Weindling entered the securities industry in 1982. From October 2007 until April 2012, Weindling was associated with Paulson Investment Company, Inc. Thereafter, in April 2012, Weindling became registered with JHS Capital Advisors, LLC (JHS). On May 16, 2014, JHS filed a Form U5 that terminated Weindling’s registration with JHS.

On the form, JHS reported that Weindling effected transactions within the account of a deceased customer and that he was aware of journal requests containing the forged signature of the deceased customer. Thereafter, FINRA sought to investigate JHS’s statements by sending Weindling requests for information. On January 27, 2015, FINRA sent a letter to Weindling’s counsel requesting that Weindling provide documents and information. Despite, multiple requests for information, Weindling acknowledged receipt of FINRA’s requests but confirmed that he did not intend to provide the requested documents and information.

Gana LLP Files Customer Complaint Against JHS Capital Concerning Broker Joe Alijaj

August 11, 2014 | by Staff Attorney

The law office of Gana Weinstein LLP recently filed a securities arbitration on behalf of an investor against JHS Capital Advisors, LLC f/k/a Pointe Capital, Inc. (JHS Capital) concerning allegations that the broker recommended unsuitable investments, churned the account, and ultimately depleted the claimant’s assets.

The claimant is sixty-one years old and spent the majority of his career running seed companies. The claimant alleged that he had little understanding of the stock and bond markets. The complaint alleged that Enver Rahman “Joe” Alijaj (Alijaj), a broker with JHS Capital, cold called claimant and aggressively pursued the opportunity to manage claimant’s money. The complaint alleged that prior to opening his account with JHS, claimant never maintained a brokerage account. The claimant alleged that he explained to Alijaj that he wanted to focus on preservation of his capital.

In reliance on Alijaj’s assurances, the claimant alleged that he provided the broker with a substantial portion of his net worth. Rather than comply with the claimant’s investment needs, the complaint alleged that Alijaj took advantage of the claimant’s inexperience by investing the funds in unreasonably volatile stocks and excessively traded (churned, a type of securities fraud) his account to generate excessive commissions. According to the complaint, within days of opening the account, Alijaj leveraged the account and actively traded speculative small cap stocks in unsuitable investments including A-Power Energy Generation Systems Ltd. (APWR), Silicon Motion Technology Corp (SIMO), and Yingli Green Energy Holdings Co. (YGE).

Gana LLP Files Claim Against JHS Capital Advisors Concerning Broker Enver Alijaj’s Activities

July 7, 2014 | by Staff Attorney

On June 27, 2014, Gana Weinstein LLP filed a statement of claim against JHS Capital Advisors, LLC, formerly known as Pointe Capital Inc, on behalf of an Arkansas couple. The claims stem from the misconduct of Enver R. “Joe” Alijaj, a former Pointe Capital financial advisor who has worked at several different firms and has a record laden with customer complaints and FINRA violations. The statement of claim brought by Gana Weinstein LLP on Claimants’ behalf alleges (1) unsuitable recommendations, (2) failure to supervise, (3) breach of fiduciary duty, (4) fraudulent misrepresentation, and (5) breach of contract.

Around July 2008, Claimants, a couple from Arkansas nearing retirement, received a cold call from Mr. Alijaj—a broker with Respondent JHS. (A cold call is the solicitation of potential customers who were not anticipating such an interaction. Cold calling is a technique whereby a salesperson contacts individuals who have not previously expressed an interest in the products or services that are being offered). Mr. Alijaj aggressively pursued the Claimants’ business, promising them that he would preserve their retirement capital while providing them with increased returns.

Mr. Alijaj allegedly persuaded Claimants to give him approximately $250,000, which they believed was being safely and practically invested to accommodate their needs. Instead, Mr. Alijaj put all of Claimants’ funds into just three extremely thinly traded and highly volatile stocks. The three stocks were A-Power Energy Generation Systems Ltd. (“APWR”), Silicon Motion Technology Corp (“SIMO”), and Yingli Green Energy Holdings Co. (“YGE”). By January 2009, only five months after Mr. Alijaj made the purchases, APWR, SIMO, and YGE were each down 81%, 66%, and 59% respectively. At no point during this five-month freefall did Mr. Alijaj adjust the Claimants’ accounts or even communicate to them an explanation for the price depreciation or potential remedial action.