Merrill Lynch Tag Archives — Securities Lawyers Blog

Merrill Lynch Financial Advisor Mark Jones Has Nine Investor Complaints

September 11, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Financial Advisor Mark Jones (Jones), currently employed by Merrill Lynch, has been subject to at least nine customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Jones’ customer complaints alleges that Jones recommended unsuitable investments in various investments, among other allegations of misconduct relating to the handling of their accounts.

In May 2019, a customer complained that Jones violated the securities laws by alleging that Jones engaged in material misrepresentations. The claim settled in the amount of $70,026.

In February 2014, a customer complained that Jones violated the securities laws by alleging that Jones engaged in unsuitable investment advice, and material misrepresentations. The claim settled in the amount of $26,250.

In April 2002, a customer complained that Jones violated the securities laws by alleging that Jones engaged in unsuitable investment advice. $400,000 in damages were granted.

Adviser Michael Greenstone Accused of Making Unsuitable Investment Recommendations

April 10, 2021 | by Staff Attorney

Adviser Michael Greenstone (Greenstone), currently employed at Merrill, Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), has been subject to at least nine customer complaints during the course of his career. Eight of the nine complaints against Greenstone allege unsuitability. In addition, Greenstone recently had nine customer complaints expunged in mass from his record using FINRA’s notoriously flawed expungement process. According to the PIABA Foundation, 1,078 expungement-only cases have been filed from 2015 to 2018. The study concluded that “The Finra [expungement] process is being systematically gamed, exploited and abused with one-sided hearings, manipulation of arbitrator selection, deletion of significant customer complaints and abusive (and possibly fraudulent) conduct to such an extent that it must be frozen until it can be repaired.”

According to a BrokerCheck report, there have been two complaints against Greenstone in the past two years alleging him of making unsuitable investment recommendations. The most recent allegation against Greenstone is pending and the customer is seeking $5 million in damages for unsuitable investment recommendations made from 2013 through 2019. Over the course of Greenstone’s career, several customers have accused him of making unsuitable investment recommendations. The aggregate settlement amount for his collective complaints is in excess of $240,000.00. Greenstones two largest reported settlements occurred in 2009 and in 1999. In July 2009, a customer alleged Greenstone placed her in a portfolio that was not suitable for her risk tolerance and age. This matter settled for approximately $114,000.00. Moreover, in July 1999, accused Greenstone of excessive and unsuitable trading. This matter settled for $106,000.00.

Advisor James G. Babineaux Accused of Making Unsuitable Investment Recommendations and Unauthorized Trading

April 10, 2021 | by Staff Attorney

Advisor James Babineaux (Babineaux), currently employed by Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch) has been subject to at least two customer complaints during the course of his career. According to a BrokerCheck report the customer complaints concern unsuitable investment recommendations and unauthorized trading. In August 2018, a customer alleged Babineux engaged in unauthorized trading from July 26, 2018 through July 27, 2018. Additionally, that same year, another customer alleged that Babineux engaged in unsuitable investment recommendations and unauthorized trading from January 18, 2018 through July 27, 2018. Both matters settled for $1,322.21 and $2,853.93 respectively.

Unauthorized trading occurs when a broker sells securities without the prior consent from the investor. All brokers, who do not have discretionary authority to trade an account, are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). Under the NASD Conduct Rule 2510(b), a broker is prohibited from trading in a non-discretionary customer account without prior written authorization from the customer. Unauthorized trading is a type of investment fraud because the Securities Exchange Commission (SEC) has found that disclosures of trades being made are essential and material to an investor. Unauthorized trading is often a gateway violation to other securities violations including churning, unsuitable investments, and excessive use of margin.

Advisor and Broker Ralph Byer Accused of Making Unsuitable Investment Recommendations

April 5, 2021 | by Staff Attorney

Advisor and broker Ralph Byer (Byer), currently employed by Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), has a substantial complaint history. Byer has been subject to at least seven customer complaints during the course of his career. According to a BrokerCheck report, the majority of his customer complaints (four out of seven) concern unsuitable investment recommendations.

In June 2018, a customer alleged Byer engaged making unsuitable investment recommendations and excessive trading from 1990 until 2018. Ultimately this matter settled for $565,000.00. Additionally, from 2001 through 2009, three other known customer complaints were brought against Byer for making unsuitable investments. Moreover, in 1999, a customer alleged Byer engaged in churning. That matter ultimately settled in favor of the client for $22,500.00.

Advisors have an obligation to make only suitable recommendations for investments to the client. There are many investments that are not appropriate for the majority of investors or for certain investors given their risk tolerance, age, and other factors. Advisors should not present these investment options to clients. There are two screens that advisors must employ to determine whether an investment is suitable for a client. First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors. The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one. 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.

Merrill Lynch Financial Advisor Juan Barreras Has Suitability Customer Complaints

May 11, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Juan Barreras (Barreras), currently employed by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) has been subject to at least five customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Barreras’ customer complaints alleges that Barreras recommended unsuitable investments in various investments including allegations of unsuitable municipal bonds and mutual fund securities among other allegations of misconduct relating to the handling of their accounts.

In August 2019 a customer complained that Barreras violated the securities laws by alleging that Barreras made investments recommendations in unsuitable investment recommendations and misrepresentation. The claim alleges $800,000 in damages and is currently pending.

In January 2019 a customer complained that Barreras violated the securities laws by alleging that Barreras made investments recommendations in unsuitable investment recommendations and misrepresentation. The claim alleges $600,000 in damages and is currently pending.

In August 2016 a customer complained that Barreras violated the securities laws by alleging that Barreras made investments recommendations in unsuitable investment recommendations, misrepresentation and omission of material facts from January 2011 to December 2016. The claim alleges $500,000 in damages and settled for $125,000.

Heather Weber Has Customer Complaints Over Options Trading

January 31, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Heather Weber (Weber), currently employed by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) has been subject to at least ten customer complaints during the course of her career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Weber’s customer complaints alleges that Weber recommended unsuitable investments in options among other allegations of misconduct relating to the handling of their accounts.

In September 2019 a customer complained that Weber violated the securities laws by alleging that Weber engaged in sales practice violations related to unsuitable investment recommendations and misrepresentations concerning options. The claim alleges $350,000 in damages and is currently pending.

In May 2017 a customer complained that Weber violated the securities laws by alleging that Weber engaged in sales practice violations related to unsuitable investment recommendations and misrepresentation from February 2012 to June 2014. The claim alleged $1,000,000 in damages and settled for $92,500.

There are different risky strategies that can employ options trading. One such strategy is the use of the iron condor, which involves the purchase of multiple uncovered options versus safer covered options. When an option is covered the investor holds an offsetting stock position in the asset underlying the option. The stock position can help offset the risk of the short position of the option. However, with an uncovered option the investor has unmitigated risk. If the underlying stock substantially drops or increases in value for an uncovered position the investor have only two options. Either the investor has to let the options expire and lose the entire investment or buy the stock at a disadvantageous price.

Merrill Lynch Advisor Jeffrey Smith Subject to Multiple Investment Complaints

June 5, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Jeffrey Smith (Smith), currently employed by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Smith) has been subject to at least eight customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Smith’s customer complaints allege that Smith recommended unsuitable securities recommendations in equity securities among other allegations of misconduct in the handling of customer accounts.

In April 2019 a customer filed a complaint alleging that Smith violated the securities laws by, among other things, that Smith made unsuitable investments and failed to follow instructions. The claim is currently pending.

In February 2019 a customer filed a complaint alleging that Smith violated the securities laws by, among other things, that Smith made unsuitable investments. The claim is currently pending.

In October 2016 a customer filed a complaint alleging that Smith violated the securities laws by, among other things, that Smith made unsuitable recommendations from March 2015 until October 2016 causing damages. The claim settled for $50,000.

Ameriprise Advisor Stan Leavitt Has An Options Trading Complaint

April 30, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Stan Leavitt (Leavitt), currently employed by Ameriprise Financial Services, Inc. (Ameriprise) has been subject to at least two customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Leavitt’s customer complaints allege that Leavitt made unsuitable recommendations and made misrepresentations.

In October 2018 a customer filed a complaint alleging that Leavitt violated the securities laws including misrepresentations and unsuitable investments from April 2015 until June 2017 in options causing $550,000 in damages. The claim is currently pending.

In July 2018 a customer filed a complaint alleging that Leavitt violated the securities laws including misrepresentations from December 2015 until June 2017 in a variable annuity product causing $31,015 in damages. The claim settled.

Advisor Christopher Hellman Accused of Misappropriating Client Funds

January 20, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Christopher Hellman (Hellman), formerly associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) in December 2018, was sanctioned and barred from the securities industry by FINRA over accusations of potentially selling unapproved products.

In December 2018 FINRA alleged that Hellman consented to the sanction and to the entry of findings that he failed to provide FINRA with requested documents and information during its investigation. FINRA found that Merrill Lynch terminated Hellman’s registration for conduct including failure to adhere to firm standards regarding selling away and failure to fully disclose participation in outside business activities.

The providing of loans, misappropriating funds through false pretenses, or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.

At this time it is unclear the nature and scope of Hellman’s activities. Hellman’s disclosures do not include any outside business activities (OBAs) disclosures.

Thurston Spinger Advisor Paul Muran Subject to Customer Complaints

January 9, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Paul Muran (Muran), currently employed by Thurston Spinger Financial (Thurston Spinger) has been subject to four customer complaints during his career. In addition, Muran has been twice terminated for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Muran concern allegations of unsuitable investments and allegations of overconcentration involving equities, oil and gas, life settlement contracts, and structured products.

In March 2011, Muran was terminated by Merrill Lynch Pierce, Fenner and Smith, Inc. (Merrill Lynch) over allegations that he participated in an outside investment without the firm’s approval. Thereafter, in October 2017 Muran was then terminated by UBS Financial Services, Inc. (UBS) on similar charges that Muran facilitated client purchases of life-settlement products not listed on firm platform, failing to escalate a client complaint, responding to the complaint without managerial approval, and failing to disclose a client’s subsequent investment in an outside passive investment.

In November 2018 a customer complained that Muran recommended investments that violated the securities laws by recommending a life settlement contract that was misrepresented and unsuitable. The client further alleges unauthorized trading of structured products and that the client had no idea she was borrowing from her loan account. The customer alleges an unknown amount of damages but the claim is currently settled for $250,000.

In May 2018 a customer complained that Muran recommended investments that violated the securities laws including unsuitable investments, unauthorized credit line agreement, unauthorized trades, uninvested funds, and lost market opportunity. The customer claimed $183,000 in damages and is currently pending.