Articles Tagged with material misrepresentations

shutterstock_184430645-300x225According to BrokerCheck records, Elaine LaCerte (LaCerte), also known as Elaine Diones and Elaine Diones Helzer, was suspended by the Financial Industry Regulatory Authority (FINRA) in August 2017.

LaCerte was suspended for allegedly engaging in an unsuitable pattern of short-term trading of Unite Investment Trusts (UITs) in over 100 customer accounts. Without admitting or denying the findings, LaCerte consented to the sanctions and the entry of findings. The findings stated that “in connection with these accounts, LaCerte repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates. In addition, on more than 100 occasions, LaCerte recommended that her customers use the proceeds from the short-term sale of a UIT to purchase another UIT with identical investment objectives. LaCerte’s recommendations caused the customers to incur unnecessary sales charges, and were unsuitable in view of the frequency and cost of the transactions.” LaCerte has been banned from the industry for six months and was ordered to pay a $5,000 fine.

Moreover, LaCerte has been subject to four customer disputes.

Hits of the 90's front cover
Music lovers looking to reminisce while enjoying classic hits from the 80’s and 90’s may not be getting what they paid for.  Producers have created and marketed a compilation of some of those classic tunes, which include songs such as “Only In My Dreams” by Debbie Gibson, “Jenny/867-5309” by Tommy Tutone, “Hold On” by Wilson Phillips, and “Ice Ice Baby” by Vanilla Ice. Unfortunately, the packaging and marketing of these discs never alerted consumers to the fact that they were not purchasing the original recordings.

On March 20, 2014, Gana Weinstein LLP filed a class action suit, on behalf of Celeste Farrell and other individuals who purchased the music albums: “Hits of the 80’s: Platinum Collection” 2-CD set and/or “Hits of the 90’s: Platinum Collection” 2-CD set. The Complaint alleges that Tutm Entertainment (also known as Drew’s Entertainment) misled consumers by failing to indicate that these albums were comprised of inferior quality re-recorded songs. The Complaint further avers that Tutm Entertainment allowed consumers to believe that they were purchasing a compilation of original recordings, and thus distorted their ability to make an informed purchase decision.

The story has gained significant traction, as it was picked up by various news outlets only two days after the Complaint was filed with the United States District Court, District of New Jersey. As reported by, re-recording is considered to be an open secret within the music industry, with musicians often having legitimate, albeit self-serving, reasons for re-recording their original hits. The site explains that artists are often required to work around contractual obligations and copyright termination to generate additional revenue from some of their classic hits. Musicians rights to re-record, however, do not absolve Tutm Entertainment and other music producers and sellers of music of their obligation to be completely forthcoming with consumers. The New Jersey Consumer Fraud Act explicitly prohibits any deception, misrepresentation, or knowing concealment intended to be relied on in connection with the sale or advertisement of merchandise.

The Financial Industry Regulatory Authority (FINRA) recently sanctioned Source Capital Group (Source Capital) registered representatives Kevin Cline (Cline), Robert Burr (Burr), Vincent Christopher (Christopher), and Thomas Gilleland (Gilleland).  FINRA’s findings concerned allegations that the brokers failed to adequately disclose material facts and made sales through misstatements in oil and gas partnership interests in Blue Ridge Securities (Blue Ridge) and Argyle Securities. (Argyle).

According to FINRA, from at least October 11, 2006, and December 17, 2012, the named brokers violated the federal securities laws and FINRA rules in connection with selling Blue Ridge and Argyle offerings.  Cline is the branch office manager for Source Capital’s Bowling Green, Kentucky branch office on Adams Street and Burr managed the Wright Street office where Christopher and Gilleland were brokers.  Source Capital’s Adam Street branch office was the sole seller of private placement offerings of oil and gas securities issued by Blue Ridge’s limited partnerships all of which were managed by Blue Ridge Group, Inc.  Source Capital’s Wright Street branch office was the sole seller of private offerings of Argyle limited partnerships managed by Argyle Energy, Inc.   Blue Ridge and Argyle were both housed at the Adams Street branch office and were owned by Robert “Bob” Burr, the father of Burr as the controlling stockholder and former officer of both Blue Ridge and Argyle.

FINRA alleged that Cline failed to adequately disclose material information in selling Blue Ridge to investors.  Specifically, FINRA found that Blue Ridge gave money to Cline that Cline used to pay Source Capital representatives a $2,000 monthly salary in advance of their draws which were not always repaid.  FINRA concluded that the failure to adequately disclose that Cline used Blue Ridge funds to pay compensation to Source representatives was a material omission in violation of FINRA Rule 2010 and NASD Rule 2110, and Section 17(a)(2) of the Securities Act of 1 933, 15 U.S.C. § 77q(a)(2).

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