Madison Avenue Securities Tag Archives — Securities Lawyers Blog

Advisor David Barber Barred Over Unauthorized Trading

October 6, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor David Barber (Barber), formerly employed by Madison Avenue Securities, LLC (Madison Avenue) has been subject to five customer complaints, two regulatory actions, and one employment termination for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of a Barber customer complaints allege that Barber made unsuitable recommendations in equity securities.

In March 2018, FINRA sanctioned Barber and barred him from the industry. FINRA alleged that Barber failed to produce information and documents request by FINRA during the course of an ongoing examination to determine whether he engaged in unauthorized trading in the accounts of customers of his member firm, exercised discretion in customer accounts without written authorization, or otherwise acted in violation of FINRA rules.

In addition, in September 2011 Raymond James and Associates, Inc. (Raymond James) discharged Barber claiming that he was alleged to misappropriate funds from a client, engaged in outside business activities and selling away, and that the firm lost confidence in the broker.

James Geake Subject to Variable Annuity and Alternative Investment Complaints

October 2, 2017 | by Staff Attorney

In February 2017, broker James Geake (Geake) was subject to a customer complaint alleging $347,083 in damages concerning equity indexed annuities. The customer alleges that he was sold equity indexed annuities that gave the broker a bonus for signing clients and that it was a bait and switch scheme. The complaint is currently pending.

Geake is currently associated with Madison Avenue Securities, LLC (Madison Avenue). The law offices of Gana Weinstein LLP are currently investigating customer complaints concerning this broker. According BrokerCheck Geake has a total of four customer complaint disclosures including allegations of unsuitable investments in annuities and alternative investments among other claims.

Equity indexed and variable annuities are complex financial and insurance products. In fact, recently the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing. Essentially, a variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you. The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen. The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

VFG Securities Broker Mark Trewitt Subject to Customer Complaints Over Non-Traded REITs and Private Placements

September 14, 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 Mark Trewitt (Trewitt). According to BrokerCheck records Trewitt has been subject to at least four customer complaints. The customer complaints against Trewitt allege securities law violations that including unsuitable investments and misrepresentations among other claims. Many of the complaints involve direct participation products (DPPs) and private placements including non-traded real estate investment trusts (REITs), and other alternative investments.

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 oil and gas partnerships, REITs, and other alternative investments 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, if they can be redeemed. 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.

Investment Investigation: Sales of Adageo Energy Private Placements

February 5, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating potential unsuitable investments and recommendations in a number of oil and gas related ventures including Adageo Energy. According to the company’s website Adageo Energy specializes in high-growth, high-return opportunities in the energy sector. The company’s focus includes the identification, acquisition, drilling, development, and operation of oil and gas properties. Adageo Energy is a sponsor of several oil and gas private placements.

One such issuance is Adageo Energy Partners, LP which according to SEC filings sought to raise $50 million and raised at least $31 million of that amount through brokerage firms including Direct Capital Securities, Inc., Madison Avenue Securities, Inc., WFP Securities, Inc., Arete Wealth Management, LLC, Newbridge Securities Corporation, Charter Pacific Securities, LLC, ePLANNING Securities, Inc., Sunset Financial Services, Inc., Jesup & Lamont Securities Corp., and Capital Guardian, LLC.

As reported in Reuters for issuers other than Adageo Energy, many of these types of private placement deals fail and investors take outsized risks compared to the scant compensation they are likely to receive. The issue with oil and gas private placements is two fold. First the much of the investor’s funds are eaten up by fees and costs and are never used for investment purposes. For instance and analysis of Atlas Energy LP found that the issuer typically charged between 15 percent and 20 percent in upfront fees from investors and paid brokers an additional 10 percent of the total offering in sales commissions. According to Reuters, investors only get to see 65-70% of their capital actually put to work on oil and gas projects.

Broker Investigation: Madison Avenue Securities’ Noel Vincent

November 30, 2015 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are interested in speaking with clients of Noel Vincent (Vincent). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Vincent has been the subject of at least 9 customer complaints, one regulatory event, and three judgment or liens. The customer complaints against Vincent allege securities law violations that claim unsuitable investments, misrepresentations, and fraud among other claims.

The most recent complaint was filed in August 2015, and alleged $50,000 in damages due to claims pertaining to investments purchased from 2005 through 2007 that were unsuitable based on the client’s risk tolerance, investment objectives, investment knowledge, time horizon, and liquidity needs.

In March 2015, a customer filed a complaint alleging an unsuitable series of investments between 2006 through 2009 resulting in damages of $413,000. In another case filed in October 2013, the client alleged unsuitable investments were made in 2007 resulting in $190,000 in damages. The case settled for $26,331. Also in April 2013, another customer complained that Vincent sold unregistered securities and committed fraud causing $638,000 in damages.

Gemini Real Estate Advisors Risk Investor Funds in Private Legal Dispute

November 15, 2014 | by Staff Attorney

As reported in InvestmentNews, three members of a real estate partnership that sells private placements in the real estate space are in the middle of a legal dispute that could potentially endanger millions of dollars in loans and investor capital as a result. The dispute is among the owners of Gemini Real Estate Advisors and began earlier this year when William Obeid, one of the partners, asked the other two partners, Christopher La Mack and Dante Massaro, to restructure the company to reflect certain areas of expertise. Those talks soon broke down and have now ended up in court.

Gemini Real Estate Advisors oversees a real estate portfolio of more than $1 billion and was founded in 2003. The complaint alleges that Mr. Obeid abused his position for personal gain through concealed unauthorized transfers of company funds and hiring of family members at inflated salaries. Thereafter, Mr. Obeid filed his own complaint in New York against Mr. La Mack and Mr. Massaro. alleging that the two other Gemini partners had proposed a business divorce and have acted in an effort to freeze him out in order to strengthen their negotiation position in discussions concerning a buyout of Mr. Obeid’s interest.

According to Mr. Obeid’s lawsuit, his partners’ strategy would harm Gemini and investors, by paralyzing Gemini’s operations, causing existing development projects to become distressed, and risk default on more than $97 million in loans and $15 million of investors’ equity.