Articles Tagged with PHX Financial

shutterstock_836360-300x225The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Serge Parakhnevich, currently employed by PHX Financial, Inc. (PHX), has been subject to at least three customer complaints and one regulatory sanction in his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Parakhnevich customer complaints allege that Parakhnevich engaged in unsuitable investment practices and excessive trading, among other allegations made by customers.  Also, the regulatory sanction claims that Parakhnevich fraudulently traded in the account of a customer without approval.

In August 2020, FINRA made findings in a consent order that Parakhnevich violated the securities laws by executing trades in a customer’s accounts without the customer’s prior written authorization or his member firm’s approval of the account as discretionary. The findings stated that Parakhnevich completed and submitted firm compliance questionaries wherein he falsely answered questions related to whether he handled customer accounts on a discretionary basis. Without admitting or denying the findings, Parakhnevich consented to the sanctions. Parakhnevich was issued a $7,500 fine along with all his registration capacities being suspended for forty-five days.

In April 2020, a customer complained that Parakhnevich violated the securities laws by alleging that Parakhnevich engaged in unsuitable investment practices. The claim alleges $249,281 in damages and is pending.

In August 2015, a customer complained that Parakhnevich violated the securities laws by alleging that Parakhnevich engaged in unauthorized trading, excessive trading, and churning. The claim alleged $100,000 and was denied.

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shutterstock_184430498The securities lawyers of Gana Weinstein LLP are investigating customer complaints against broker Barry Jin (Jin).  There are at least three customer complaints against Jin.  The customer complaints against Jin allege a number of securities law violations including that the broker made unauthorized trading among other claims.

Advisors are not allowed to engage in unauthorized trading.  Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b).  These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

One of the firm’s Jin was registered with, Aegis Capital Corp. (Aegis), has been identified as brokerage firm that employs troublesome brokers.  According to a recent study conducted by the Securities Litigation and Consulting Group entitled “How Widespread and Predictable is Stock Broker Misconduct?” the incidents of investor harm at Aegis is extraordinarily high.  The study ranked Aegis as the worst brokerage firm finding that brokers at the firm had over a 35% misconduct rate.  The study stated that investors should stay away from Aegis “Given their coworkers’ disclosure record as of 2014, 83.7% of the brokers at these six firms would be in the highest risk quintile as defined in the FINRA study and should be avoided by investors. The BrokerCheck reports for most of the brokers at these six firms should prominently display a skull and crossbones warning.”

shutterstock_189006551The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Johnathan McHale (McHale). According to BrokerCheck records there are at least 6 customer complaints, one employment separation for cause, and 6 judgments or liens that have been filed against McHale. The most recent customer complaint against McHale filed in April 2014 alleges that McHale breached his fiduciary duty, negligence, and misrepresentations in the handling of the customer’s account leading to $108,000 in damages. The claim was settled for $14,995. In August 2012, another client alleged that McHale engaged in unsuitable investments leading to $43,000 in damages. The claim was denied.

In May 2014, National Securities Corporation terminated McHale alleging that he violated the firm’s policy by using his personal email address for business correspondence. In addition, McHale has 6 judgements. One tax lien filed in March 2011 for $34,598. Substantial judgements and liens on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services. A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances

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_95643673According 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.

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