Pointe Capital

Broker Investigation: Financial Advisor Salvatore Pizzimenti

November 3, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Salvatore Pizzimenti (Pizzimenti) has been the subject of at least 4 customer complaints. Customers have filed complaints against Pizzimenti alleging securities law violations including claims of churning and excessive trading, unsuitable investments, excessive commissions, unauthorized trading, breach of fiduciary duty, and fraud among other claims. In 2013, a customer complained that Pizzimenti churned their account causing $500,000 in damages. In August 2012, another customer also complained that Pizzimenti recommended a high risk private placement and also charged excessive fees causing $1,000,000 in damages.

Pizzimenti entered the securities industry in 2004. From January 2007, until January 2009, Pizzimenti was registered with Pointe Capital, Inc. From January 2009, until February 2010, Pizzimenti was associated with National Securities Corporation. From February 2010, until August 2011, Pizzimenti was a registered representative of J.P. Turner & Company, L.L.C. Since August 2011, Pizzimenti has been associated with Legend Securities, Inc. out of the firm’s New York, New York office location.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.

Broker Investigation: Claims Against Broker Glen Delaney

October 31, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Glen Delaney (Delaney) has been the subject of at least 2 customer complaints and 3 judgements or liens. Customers have filed complaints against Delaney alleging securities law violations including unauthorized trades, breach of fiduciary duty, and unsuitable investments among other claims. In addition, Delaney has had difficulty managing his own finances and on August 13, 2015, disclosed a civil judgment of $50,225, on November 19, 2010, disclosed a civil judgement of $9,720, and in 2006 had a civil judgement of $600. Judgements are often a sign that the broker cannot manage their own personal finances and may be tempted to recommend high commission products or strategies to clients in order to satisfy debts.

Delaney entered the securities industry in 2005. Since 2008 Delaney has been registered with Pointe Capital, Inc., until June 2009. From June 2009, until October 2010, Delaney was registered with Global Arena Capital Corp. Thereafter, from October 2010, until April 2012, Delaney was associated with Brookstone Securities, Inc. From April 2012, until June 2015, Delaney was a registered representative of Rockwell Global Capital LLC. From June 2015, until August 2015, Delaney was registered with Primary Capital, LLC. Finally, since August 2015, Delaney has been associated with Craig Scott Capital, LLC out of the firm’s Uniondale, New York office location.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.

Broker Spotlight: Claims Against Broker John Lopinto

October 31, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker John Lopinto (Lopinto) has been the subject of at least two customer complaints. The customer complaints against Lopinto allege securities law violations that claim churning and excessive trading, unsuitable investments, excessive commissions, breach of fiduciary duty, and fraud among other claims. One complaint alleged that Lopinto caused $4,000,000 in damages. In another claim filed the customer alleged $1,000,000 in damages as a result of high risk private placements and account churning.

Lopinto entered the securities industry in 2002. From January 2007 until January 2009, Lopinto was associated with Pointe Capital, Inc. From January 2009 until February 2010, Lopinto was associated with National Securities Corporation. Thereafter, from February 2010, until August 2011, Lopinto was associated with J.P. Turner & Company, L.L.C. Finally, since August 2011 onward Lopinto has been associated with Legend Securities, Inc. out of the firm’s New York, New York office location.

Churning is investment trading activity in the client’s account that serves no reasonable purpose for the investor and is transacted solely to profit the broker. The elements to establish a churning claim, which is considered a species of securities fraud, are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

Regulators Sanction Broker Edward Segur Over False Statements

October 30, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Edward Segur (Segur) has been the subject of at least 2 customer complaints, 3 judgements or liens, 1 criminal matter, and 2 regulatory actions. Customers have filed complaints against Segur alleging securities law violations including excessive commissions and unauthorized trades among other claims. In addition, Segur has had difficulty managing his own finances and had a tax lien of $125,687 imposed in February 2015. Tax liens and judgements are often a sign that the broker cannot manage their own personal finances and may be tempted to recommend high commission products or strategies to clients in order to satisfy debts.

Finally, two state regulators have brought actions against Segur. The state of Arkansas alleged that in January 2013, Segur cold called a resident of the state to recommend the purchase of Sandridge Energy, Inc. (Sandridge). At that time Sandridge was trading at about $7 per share and that Segur stated that he had information that the stock would rise to $12 in less than three months because a new chief executive officer would take over Sandridge causing the stock price to increase. The state of Arkansas found that such statements were unjustified and violated the state’s securities laws. In addition, the state of New Hampshire alleged that Segur cold called one of its residents even though the resident was on the state’s do not call list.

Segur entered the securities industry in 1998. An examination of Segur’s employment history reveals that Segur 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 Segur’s 16 year career he has switched firms 22 times even returning to several firms on different occasions. Many of the firms have been expelled by FINRA including John Thomas Financial which was run by Anastasios “Tommy” Belesis who recently agreed to be banned from the securities industry when the SEC accused him of defrauding investors in two hedge funds. In addition, John Thomas faced allegations of penny-stock fraud by FINRA after the firm reaped more than $100 million in commissions over its six-year history before it closed in July. According to new sources trainees at the firm earned as little as $300 a week to pitch stocks with memorized scripts.

FINRA Investigates Broker Brent Porges Over Supervision and Churning

October 28, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Brent Porges (Porges) has been the subject of at least four customer complaints, six judgements or liens, and one regulatory investigation. The Customer complaints against Porges alleges securities law violations that claim churning and excessive trading, unsuitable investments, securities fraud, and excessive commissions among other claims. The most recent complaint filed alleges losses of $900,000. In addition, in May 2015, a customer was awarded $338,454 in an arbitration claim including Porges where the panel assessed $107,944 against Porges and others jointly and severally and also a finding of punitive damages against Porges and others jointly and severally under New York law.

In addition to customer complaints Porges is subject to numerous liens including a $7,500 tax lien in March 2015, a $9,000 tax lien in February 2014, a $64,000 tax lien in August 2013, a $5,200 tax lien in December 2012, among other liens. Tax liens and judgements are often a sign that the broker cannot manage their own personal finances and may be tempted to recommend high commission products or strategies to clients in order to satisfy debts.

Finally, the brokercheck record also states that on September 29, 2015, FINRA initiated an investigation into Porges conduct. The investigation relates to false statements and testimony, violations of FINRA’s supervisory rules and churning.

Gana LLP Files Customer Complaint Against JHS Capital Concerning Broker Joe Alijaj

August 11, 2014 | by Staff Attorney

The law office of Gana Weinstein LLP recently filed a securities arbitration on behalf of an investor against JHS Capital Advisors, LLC f/k/a Pointe Capital, Inc. (JHS Capital) concerning allegations that the broker recommended unsuitable investments, churned the account, and ultimately depleted the claimant’s assets.

The claimant is sixty-one years old and spent the majority of his career running seed companies. The claimant alleged that he had little understanding of the stock and bond markets. The complaint alleged that Enver Rahman “Joe” Alijaj (Alijaj), a broker with JHS Capital, cold called claimant and aggressively pursued the opportunity to manage claimant’s money. The complaint alleged that prior to opening his account with JHS, claimant never maintained a brokerage account. The claimant alleged that he explained to Alijaj that he wanted to focus on preservation of his capital.

In reliance on Alijaj’s assurances, the claimant alleged that he provided the broker with a substantial portion of his net worth. Rather than comply with the claimant’s investment needs, the complaint alleged that Alijaj took advantage of the claimant’s inexperience by investing the funds in unreasonably volatile stocks and excessively traded (churned, a type of securities fraud) his account to generate excessive commissions. According to the complaint, within days of opening the account, Alijaj leveraged the account and actively traded speculative small cap stocks in unsuitable investments including A-Power Energy Generation Systems Ltd. (APWR), Silicon Motion Technology Corp (SIMO), and Yingli Green Energy Holdings Co. (YGE).

Gana LLP Files Claim Against JHS Capital Advisors Concerning Broker Enver Alijaj’s Activities

July 7, 2014 | by Staff Attorney

On June 27, 2014, Gana Weinstein LLP filed a statement of claim against JHS Capital Advisors, LLC, formerly known as Pointe Capital Inc, on behalf of an Arkansas couple. The claims stem from the misconduct of Enver R. “Joe” Alijaj, a former Pointe Capital financial advisor who has worked at several different firms and has a record laden with customer complaints and FINRA violations. The statement of claim brought by Gana Weinstein LLP on Claimants’ behalf alleges (1) unsuitable recommendations, (2) failure to supervise, (3) breach of fiduciary duty, (4) fraudulent misrepresentation, and (5) breach of contract.

Around July 2008, Claimants, a couple from Arkansas nearing retirement, received a cold call from Mr. Alijaj—a broker with Respondent JHS. (A cold call is the solicitation of potential customers who were not anticipating such an interaction. Cold calling is a technique whereby a salesperson contacts individuals who have not previously expressed an interest in the products or services that are being offered). Mr. Alijaj aggressively pursued the Claimants’ business, promising them that he would preserve their retirement capital while providing them with increased returns.

Mr. Alijaj allegedly persuaded Claimants to give him approximately $250,000, which they believed was being safely and practically invested to accommodate their needs. Instead, Mr. Alijaj put all of Claimants’ funds into just three extremely thinly traded and highly volatile stocks. The three stocks were A-Power Energy Generation Systems Ltd. (“APWR”), Silicon Motion Technology Corp (“SIMO”), and Yingli Green Energy Holdings Co. (“YGE”). By January 2009, only five months after Mr. Alijaj made the purchases, APWR, SIMO, and YGE were each down 81%, 66%, and 59% respectively. At no point during this five-month freefall did Mr. Alijaj adjust the Claimants’ accounts or even communicate to them an explanation for the price depreciation or potential remedial action.

FINRA Suspends Former NSM Securities Supervisor Irving Burstein

February 4, 2014 | by Staff Attorney

Supervisor Irving Burstein (Burstein) has settled charges brought by the Financial Industry Regulatory Authority (FINRA) by accepting a one-year bar from the securities industry. FINRA’s allegations concerned Burstein’s activities from March 2007, until July 2011, where Burstein, as Chief Compliance Officer at NSM Securities, Inc. (NSM) failed to supervise the activities of NSM’s registered representatives and also failed to implement and enforce the firm’s Written Supervisory Procedures.

Burstein first became associated with a member firm in 1988, when he joined Stuart, Coleman & Co. Thereafter, Burstein became licensed as a registered representative of at least 15 other brokerage firms including Aura Financial Services, Inc., Pointe Capital, LLC, Legend Securities, Inc., and R.M. Stark & Co., Inc.

According to FINRA, NSM’s business model is to solicit high net worth individuals of Indian descent and then engage in a highly active trading strategy in their accounts involving only a few securities. FINRA alleged that many NSM customer accounts were excessively traded in order to generate large fees for NSM registered representatives and the firm. FINRA found that Burstein, as a supervisor, failed to supervise the activities of the firm’s registered representatives and failed to implement and enforce the firm’s written supervisory procedures. FINRA alleged that NSM, through Burstein’s conduct, helped to create a “culture of noncompliance at NSM that resulted in the rampant churning of customer accounts, unsuitable recommendations, unauthorized trading, and significant customer harm.”