Articles Tagged with LPL

shutterstock_189006551The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Scott Goldman (Goldman).  According to BrokerCheck records Goldman has been subject to at least six customer complaints.  The customer complaints against Goldman allege securities law violations that including unsuitable investments, misrepresentations, failure to supervise, and breach of fiduciary duty among other claims.  Some of the claims involve variable annuity and variable universal life insurance products.

Our firm has represented many clients in these types of products.  All of these investments come with high costs and historically have underperformed even safe benchmarks, like U.S. treasury bonds.  For example, products like variable annuities are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products.  However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them.  Further, investor often fail to understand that they have lost money until many years after agreeing to the investment.  In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

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.

shutterstock_1832895The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Susan Moore (Moore). According to BrokerCheck records Moore has been the subject of at least four customer complaints. The customer complaints against Moore allege securities law violations that including unsuitable investments and misrepresentations among other claims.   Many of the most recent claims involve allegations concerning non traded real estate investment trusts (Non-Traded REITs).

As a background since the mid-2000s Non-Traded REITs became one of Wall Street’s hottest products. However, the failure of Non-Traded REITs to perform as well as their publicly traded counterparts has called into question if Non-Traded REITs should be sold at all and if so should there be a limit on the amount a broker can recommend. See Controversy Over Non-Traded REITs: Should These Products Be Sold to Investors? Part I

Non-Traded REITs are securities that invest in different types of real estate assets such as commercial, residential, or other specialty niche real estate markets such as strip malls, hotels, storage, and other industries. Non-traded REITs are sold only through broker-dealers, are illiquid, have no or limited secondary market and redemption options, and can only be liquidated on terms dictated by the issuer, which may be changed at any time and without prior warning.

shutterstock_76996033The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Thomas Andrews (Andrews). In October 2015, LPL Financial LLC (LPL), Andrews’ then employing brokerage firm, discharged Andrews alleging that he was terminated after the firm received allegations that the broker misappropriated funds. Thereafter, Andrews was suspended from the industry by FINRA after Andrews failed to respond to requests for information regarding the termination. In November 2015, customers of Andrews filed a complaint alleging that from 2011 through 2015 Andrews formed fictitious trusts and provided application materials for annuity products. Thereafter, the customers believed they had made investments but in fact received forged statements and that their monies had not been sent to annuity companies.

In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.

shutterstock_173509961The investment fraud lawyers of Gana Weinstein LLP are investigating customer complaints and the termination by LPL Financial, LLC (LPL) of broker Alfred Talens (Talens). There is at least one customer complaint against Talens alleging that the broker made unsuitable investments in connection with the sale of a variable annuity. The customer also alleges that the broker sold an unregistered security and claimed damages of $500,000. The conduct allegedly engaged in by Talens is also referred to as “selling away” in the industry. It is unclear from public disclosures the nature of the outside business but Talens public disclosures disclose that the broker has outside business activities including Ascension Wealth Management, a DBA for insurance and tax preparation, and AWM Consulting.

In addition, there is one employment separation disclosed. LPL alleged that Talens violated firm policy regarding outside business activities and borrowed money from clients. Thereafter, FINRA sent Talens a request for documents and information which the broker refused to respond to. Accordingly, FINRA automatically barred Talens from the securities industry on July 7, 2015.

In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

shutterstock_143448874The Financial Industry Regulatory Authority (FINRA) recently barred broker Robert Tricarico (Tricarico) concerning allegations that Tricarico failed to respond to the regulator’s requests to provide information and documents concerning the an investigation into claims that Tricarico may have stolen money from clients.

Tricarico entered the securities industry in 1986. From June 2003, until April 2009, Tricarico was associated with Citigroup Global Markets Inc. Thereafter, from March 2009, to May 2011, Tricarico became registered with Wells Fargo Advisors Financial Network, LLC (Wells Fargo). Finally, from May 2011, until January 2015, Tricarico was associated with LPL Financial LLC (LPL).

On a Form U5, LPL terminated Tricarico alleging that the broker was the subject of a lawsuit by the executrix of a deceased client that alleged misappropriation of funds. Thereafter, FINRA sought to investigate LPL’s statements by sending Tricarico requests for information. On January 22, 2015, FINRA sent a letter to Tricarico requesting that Tricarico provide documents and information including his personal bank account records. Despite, multiple requests for information and some additional correspondence with Tricarico and his counsel the broker did not provide sufficient documents and information to cover FINRA’s requests. Accordingly, FINRA imposed a bar from the securities industry.

shutterstock_160486019The Financial Industry Regulatory Authority (FINRA) recently sanctioned former LPL Financial LLC (LPL) broker Marc Baldinger (Baldinger) concerning allegations that between August 2010 and November 2012, Baldinger participated in private securities transactions (a/k/a “selling away”) without prior approval of LPL. In addition, FINRA alleged that in connection with these private securities transactions Baldinger failed to disclose his position as a managing partner of two limited liability companies.

Baldinger entered the securities industry on in 1989. Thereafter, from 2001 onward Baldinger was associated with LPL until Baldinger’s employment with LPL ended on November 24, 2012. On December 13, 2012, LPI, filed a Form U5 terminating Baldinger’s registration.

The FINRA rules require that all brokers report securities transactions to their employer. However, FINRA alleged that between August 19, 2010 and November 24, 2012, Baldinger introduced 20 customers to brokerage firms by the initials “RS” and “AFS” and purchased inverse strips of Government National Mortgage Association Interest Only bonds (GNMA I/Os). According to FINRA, the 20 clients invested a combined total of at least $12 million in GNMA I/Os. FINRA found that Baldinger received compensation for these investment recommendations of approximately $233,427.