Legend Securities

Customers File Claims Against Broker David Page

October 9, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker David Page (Page) has been the subject of at least three customer complaints over the course of his career. Customers have filed complaints against Page alleging securities law violations including that the broker made unsuitable investments, breach of fiduciary duty, negligence, unauthorized trading, misrepresentations, and failure to follow instructions among other claims.

An examination of Page’s employment history reveals that the broker moves from troubled firm to troubled firm. The pattern of brokers moving in this way is sometimes called “cockroaching” within the industry. See More Than 5,000 Stockbrokers From Expelled Firms Still Selling Securities, The Wall Street Journal, (Oct. 4, 2013). In Page’s 18 year career he has worked at eight different firms. Since May 2005 until April 2008, Page was associated with Investors Capital Corp. Thereafter, from April 2008, until May 2013, Page was a registered representative with John Thomas Financial. From May 2013, until March 2015, Page was associated with Brookville Capital Partners. After that Page was associated for only one month with Tryco Securities, Inc. Finally, Page is currently registered with Legend Securities, Inc.

Several the firms Page has been associated with have been expelled by FINRA including John Thomas Financial which was run by Anastasios “Tommy” Belesis who recently agreed to be banned from the securities industry when the SEC accused him of defrauding investors in two hedge funds. In addition, John Thomas faced allegations of penny-stock fraud by FINRA after the firm reaped more than $100 million in commissions over its six-year history before it closed in July. According to new sources trainees at the firm earned as little as $300 a week to pitch stocks with memorized scripts.

Broker Spotlight: Churning Claims Against Advisor Jason Klabal

July 30, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Jason Klabal (Klabal) has been the subject of at least eight customer complaints six of which have been filed since 2014. The customer complaints against Klabal allege a number of securities law violations including that the broker made unsuitable investments, engaged in churning (excessive trading), misrepresentations, negligence, fraud, and breach of fiduciary duty among other claims.

Klabal entered the securities industry in 1997. From 1999 through October 2008, Klabal was associated with J.P. Turner & Company, L.L.C. (JP Turner). Thereafter from October 2008, until January 2010, Klabal was registered with Mercer Capital LTD. From there, Klabal was associated with Buckman, Buckman & Reid, Inc from January 2010, until August 2011. Finally, Klabal became associated with Legend Securities, Inc. in August 2011.

Pace’s employment separation involved allegations by Global Arena Capital claiming that Pace allowed client information to be taken from the office by another person. The information was later returned to the firm.

Gana LLP Investigation: Legend Securities Broker Peter Girgis

July 27, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Peter Girgis (Girgis) has been the subject of at least three customer complaints, several unreported judgement or liens, one employment separation following allegations by his brokerage firm, and two regulatory actions taken by FINRA. Customers have filed complaints against Girgis alleging a number of securities law violations including that the broker made unsuitable investments, fraud, churning (excessive trading), breach of fiduciary duty, and unauthorized trading among other claims.

Bergen entered the securities industry in 2002. From August 2006 until November 2009, Girgis was registered with J.P. Turner & Company, L.L.C. (JP Turner). From there, Girgis was associated with Brookstone Securities, Inc. until June 2012. Thereafter, Girgis was a registered representative of Joseph Gunnar & Co. LLC from June 2012 until June 2013. Finally, Girgis is currently registered with Legend Securities, Inc.

In one of the FINRA actions, FINRA alleged that, while registered through Joseph Gunnar, Girgis caused a violation of Regulation S-P of the Securities Exchange Act of 1934 on the part of his employer firm by sending nonpublic personal information about a customer to an unauthorized individual. In the second FINRA action, the regulator alleged that between February 2011 and January 2013, Girgis failed to disclose and/or timely disclose on his Form U4 four unsatisfied judgments and/or liens including a January 2011 New York income tax warrant of approximately $4,488; a January 2011 New York income tax warrant of approximately $13,418; a November 2011 New York income tax wan-ant of approximately $2,524; and a March 2011 federal income tax warrant of approximately $30,635. Subsequent to these allegations Joseph Gunnar terminated Girgis alleging that the broker violated the conditions of the FINRA action.

Regulators File Complaints Against Christopher Veale Concerning His Securities Practices

June 8, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Christopher Veale (Veale) has been the subject of at least 12 customer complaints, six judgment and lien of over $1,000,000 and five separate regulatory actions, two investigations by state regulators and one criminal matter involving a felony over the course of his career. Customers have filed complaints against Veale alleging a litany of securities law violations including that the broker made unsuitable investments, unauthorized trades, breach of fiduciary duty, misrepresentations and false statements, churning, and fraud, among other claims. Many of the claims involve recommendations in penny stocks and other speculative securities.

An examination of Veale’s employment history reveals that Veale moves from troubled firm to troubled firm. The pattern of brokers moving in this way is sometimes called “cockroaching” within the industry. See More Than 5,000 Stockbrokers From Expelled Firms Still Selling Securities, The Wall Street Journal, (Oct. 4, 2013). In Veale’s 18 year career he has worked at 18 different firms.

Since 2008 Veale has been registered with Maximum Financial Investment Group, Franklin Christopher Investment Bankers, Inc., Brookville Capital Partners, Blackwall Capital Markets, Inc., Meyers Associates, L.P., John Thomas Financial, and Legend Securities, Inc., until February 2015.

Broker Investigation: Brian Decker Churning Claims

May 5, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Brian Decker (Decker) has been the subject of at least 10 customer complaints and 2 judgments and liens over the course of his career. Customers have filed complaints against Decker alleging a litany of securities law violations including that the broker made unsuitable investments, unauthorized trades, breach of fiduciary duty, misrepresentations and false statements, and churning, among other claims. The claims involve different investment recommendations including claims involving equity securities among other speculative securities.

Decker entered the securities industry in 2006 with brokerage firm J.P. Turner & Company, L.L.C. Thereafter, in January 2007 through June 2009, Decker was associated with brokerage firm vFinance Investments, Inc. Finally since September 2009, Decker has been registered with Legend Securities, Inc. in Trinton Falls, New Jersey.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. When brokers engage in churning the investment trading activity in the client’s account serves no reasonable purpose for the investor and is transacted to profit the broker through the generation of commission payments. 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.

Broker Investigation: Salvatore Gioe’s Sales Practices

April 6, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Salvatore Gioe (Gioe) has been the subject of at least 11 customer complaints, one judgment and lien of over $197,000, and one regulatory action over the course of his career. Customers have filed complaints against Gioe alleging a litany of securities law violations including that the broker made unsuitable investments, unauthorized trades, breach of fiduciary duty, misrepresentations and false statements, churning, margin fraud, among other claims. Many of the claims involve recommendations in penny stocks and other speculative securities.

Gioe was also suspended by the state of Arkansas for one year concerning allegation that in 2013, Gioe contacted an Arkansas resident through a cold call solicitation and recommended the purchase of Uni-Pixel, Inc. However, unfortunately for Gioe the cold caller turned out to be a securities examiner with the state of Arkansas. The examiner then sat and listed as Gioe allegedly told the examiner that he had information suggesting the price of Uni-Pixel would rise from its current price of $15.65 to about $25. The examiner asked Gioe if Uni-Pixel stock was a sure thing and Gioe allegedly responded saying that he did. However, according to Arkansas Uni-Pixel was a distressed company and this information was never disclosed to the examiner on the call.

An examination of Gioe’s employment history reveals that Gioe moves from troubled firm to troubled firm. The pattern of brokers moving in this way is sometimes called “cockroaching” within the industry. See More Than 5,000 Stockbrokers From Expelled Firms Still Selling Securities, The Wall Street Journal, (Oct. 4, 2013). In Gioe’s 14 year career he has worked at 13 different firms.

Gana LLP Files Claim On Behalf of Customer Against Legend Securities for Churning and Unauthorized Trading

November 11, 2014 | by Staff Attorney

Gana Weinstein LLP recently filed a claim against Legend Securities, Inc. (Legend) on behalf of a customer with the Financial Industry Regulatory Authority (“FINRA”) alleging that Legend and Legend broker, Michael Guilfoyle, recommended unsuitable investments while churning his account and executing unauthorized trades in violation of FINRA rules and other applicable law.

In 2013, the customer received a cold call from Guilfoyle soliciting his business. Guilfoyle assured the client that he would only invest according to his investment objectives. In reliance upon Guilfoyle’s assurances, the client transferred his money to Legend. In early 2014, Guilfoyle and Legend also coaxed the client into investing his wife’s money, which she inherited from her parents. Soon after the client transferred the funds to Legend, Guilfoyle allegedly leveraged over concentrated the portfolio and began to churning the account. “Churning” is the Wall St. vernacular when there is unnecessarily high or excessive trading activity in an investor’s account, simply for the purpose of generating commissions for the broker. This is a violation of Securities and Exchange Commission (“SEC”) and FINRA rules.

More egregiously, Guilfoyle failed to contact the client concerning the trades being made in his account and acted without any prior authorization. Guilfoyle allegedly day-traded different stock positions earning fees for himself while providing no benefit to the client. For example, Guilfoyle concentrated the client’s account in speculative small cap stocks, such as Voxeljet AG (Voxeljet) that had only recently gone public. At the time, analysts warned that Voxeljet was a highly volatile stock, not suited for investors looking for long-term growth. Guilfoyle’s misconduct ultimately cost client nearly his and wife’s entire account value.

FINRA Suspends Former NSM Securities Supervisor Irving Burstein

February 4, 2014 | by Staff Attorney

Supervisor Irving Burstein (Burstein) has settled charges brought by the Financial Industry Regulatory Authority (FINRA) by accepting a one-year bar from the securities industry. FINRA’s allegations concerned Burstein’s activities from March 2007, until July 2011, where Burstein, as Chief Compliance Officer at NSM Securities, Inc. (NSM) failed to supervise the activities of NSM’s registered representatives and also failed to implement and enforce the firm’s Written Supervisory Procedures.

Burstein first became associated with a member firm in 1988, when he joined Stuart, Coleman & Co. Thereafter, Burstein became licensed as a registered representative of at least 15 other brokerage firms including Aura Financial Services, Inc., Pointe Capital, LLC, Legend Securities, Inc., and R.M. Stark & Co., Inc.

According to FINRA, NSM’s business model is to solicit high net worth individuals of Indian descent and then engage in a highly active trading strategy in their accounts involving only a few securities. FINRA alleged that many NSM customer accounts were excessively traded in order to generate large fees for NSM registered representatives and the firm. FINRA found that Burstein, as a supervisor, failed to supervise the activities of the firm’s registered representatives and failed to implement and enforce the firm’s written supervisory procedures. FINRA alleged that NSM, through Burstein’s conduct, helped to create a “culture of noncompliance at NSM that resulted in the rampant churning of customer accounts, unsuitable recommendations, unauthorized trading, and significant customer harm.”