Articles Tagged with securities fraud attorney

From having spoken to many victims of securities fraud – the hardest thing for many investor victims is asking for help.  More specifically, admitting to anyone that they had been taken advantage of.  Many victims express feelings of shock, disbelief, and often times shame for having been, apparently, an easy mark for the fraudster.

The truth is there is nothing to be a ashamed of.  Fraud is a multi-billion dollar business ensnaring tens of thousands of victims a year.  The only real question is – what are you going to do about it?  Our investment attorneys are here to help.  We’ll let you know what the potential avenues of recovery are.  Consider reaching out to our firm and refusing to be another victim while considering the following SEC statistics concerning their regulatory efforts in 2016.

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In 2016, the SEC filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers.

shutterstock_63635611-300x200The investment lawyers of Gana LLP are investigating allegations by The Securities and Exchange Commission (SEC) finding that former Morgan Stanley broker Barry Connell (Connell) working out of the Ridgewood, New Jersey office misappropriated about $5 million from clients.  After a customer complained of about $2,500,000 in unauthorized fund transfers in November 2016 Morgan Stanley terminated Connell about a week later.  Morgan Stanley terminated Connell on ground that there were “Allegations regarding unauthorized withdrawals and transfers of funds from client’s household accounts to third-party payees, which appear to be for the benefit of the former registered representative.”  Thereafter, Connell was barred by the Financial Industry Regulatory Authority (FINRA) for failing to provide documents and information related to Morgan Stanley’s statement.

In February 2017, the SEC alleged that Connell stole money from investors to settle a private lawsuit among other misuses.  Connell was alleged to have engaged in misappropriation of approximately $5 million from investment advisory clients.  The SEC found that from approximately December 2015 through November 2016, Connell carried out his scheme primarily by moving funds between client accounts and then sending wire transfers and checks from the accounts to third parties for his own benefit.  The SEC stated that over the course of approximately 11 months Connell made more than 100 unauthorized transactions through forms falsely representing that he had received verbal client authorizations for the transactions.  The SEC changed that this conduct was the engaging in transactions, acts, practices and courses of business that constitute violations of Section 206(1) and Section 206(2) of the Investment Advisers Act of 1940.

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shutterstock_94127350-300x205Our firm is investigating claims made by regulators and brokerage firms including LPL Financial LLC (LPL Financial) concerning broker Paul Dorion (Dorion).  Dorion is currently not associated with any brokerage firm due to his bar by The Financial Industry Regulatory Authority’s (FINRA) in October 2016 for failing to response to the regulator’s request for information.

FINRA’s investigation likely revolves around the disclosures concerning Dorion’s termination from LPL Financial in October 2015.  At that time Dorion was terminated for cause alleging that the broker engaged in unauthorized trading, violation of firm’s document signature policy, and concerns regarding concentrated equity positions in client accounts.  Doriaon was also alleged to have failed to respond to inquiries from the firm’s compliance department.  Subsequently, in October 2016 a customer filed a complaint alleging that Dorion had excessively traded her account which contained funds from a home mortgage.  The complaint is currently pending.  Dorion also has several tax liens dating from 2010 through 2015.

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shutterstock_27597505-300x200The securities lawyers of Gana LLP are investigating a customer complaint filed with The Financial Industry Regulatory Authority (FINRA) against broker Jed Tinder (Tinder). According to BrokerCheck records Tinder has been subject to at least four customer complaints, two judgment or liens, and two employment separations for cause. The customer complaints against Tinder alleges securities law violations that includes negligence, unauthorized trading and unsuitable recommendations among other claims.

The most recent complaint was filed in August 2016, and alleged $181,668 in damages due to claims that the broker engaged in reckless trading while employed at Western International Securities, Inc. The complaint is currently pending.

In July 2016, a customer filed a complaint against Jed Tinder alleging that while employed at Western International Securities, made an unsuitable recommendation. The customer is seeking $187,000 in damages in the pending complaint. In September 2015 another customer filed a complaint that Mr. Tinder made unsuitable recommendations dating back to 2007 causing $1,200,000 in damages. The complaint is currently pending.

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shutterstock_187532303-300x200Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Adam Estes (Estes).  According to the FINRA action, Estes consented to the sanctions and findings that he participated in private securities transactions totaling over $1.2 million without providing prior written notice his brokerage firm – J.J.B. Hilliard – nor sought the firm’s permission to participate in several businesses.  According to FINRA, Estes also engaged in outside businesses which were formed by him and others without providing prior written notice to the firm.  FINRA also alleged that Estes made misrepresentations and omissions concerning the private securities transactions and outside business activities in firm annual questionnaires and other compliance documents.

The providing of loans 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”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.

Estes entered the securities industry in 2000.  Since February 2000 Estes was registered with J.J.B. Hilliard out of the firm’s Bloomington, Indiana office location.

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shutterstock_7947664The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Jacquin Fink (Fink).  According to BrokerCheck records Fink has been subject to at least six customer complaints.  The customer complaints against Fink allege securities law violations that including unsuitable investments, misrepresentations, excessive trading, and unauthorized trading among other claims.

In April 2016, a customer complained that unsuitable investments were made and excessive trading occurred from October 2013 to January 2016 causing $581,144 in damages.  The claim is pending.  Also in April 2016, another customer alleged that unsuitable investment recommendations and misrepresentation occurred in August 2015.  The claim is pending.  In November 2015 a customer alleged unsuitable investment recommendations from October 2012 to August 2014 causing $106,092 in damages.  The claim settled.

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.

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shutterstock_103665437The securities fraud lawyers of Gana LLP are investigating a regulatory complaint (Disciplinary No. 2013038770901) filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Ricky Moore (Moore). FINRA alleged that between March 2012 and April 2013, while he was registered with Commonwealth Financial Network (Commonwealth Financial) Moore failed to disclose to the firm his outside business activities, also referred to as “selling away”, involving the facilitation of a church bond offering for a church located in Brazoria, Texas. In addition, to the FINRA complaint Moore has been subject to three customer complaints.

FINRA alleged in the complaint that Moore failed to disclose to his member firm his outside business activities involving the facilitation of a church bond offering for a church. The complaint alleges that Moore acted as the president and director of the church and facilitated the church bond offering for the church. In addition, FINRA found that Moore made a false and misleading statement on his firm’s annual compliance questionnaire when asked whether he had participated in raising capital, equity, or debt for a public or private investment. Moore answered “No” and also falsely stated that he had no undisclosed outside business activities. Thereafter, Commonwealth Financial conducted an investigation and Moore was permitted to resign after the firm terminated Moore’s registration.

In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

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shutterstock_189276023The securities fraud lawyers of Gana LLP are investigating the employment separation filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Patrick Sands (Sands). According to BrokerCheck records Sands has been the subject of at least one customer complaint and one employment termination for cause.

In November 2015, Sands’ then brokerage firm Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) terminated Sands for cause alleging that the broker engaged in conduct inconsistent with the firm’s selling away policies. Participated in private securities transactions without approval of the firm is a practice known as “selling away” in the industry. The allegations appear to involve investments in private placements or direct participation programs such as non-traded real estate investment trusts (Non-Traded REITs), oil and gas programs, or equipment leasing.

In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

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shutterstock_20354401The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) and the agency’s bar of broker Eugene Smietana (Smietana). According to BrokerCheck records Smietana has been the subject of at least four customer complaints, one employment termination for cause, and four tax liens or judgments. The customer complaints against Smietana allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, and churning (excessive trading) among other claims.

In September 2015, Smietana was barred by FINRA for failing to respond to the regulators requests for information. In addition, Smietana has several sizeable liens and judgments entered against him. 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.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades. Churning is considered a species of securities fraud. The elements of the claim 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.

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shutterstock_183554579The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker William Carlton (Carlton). According to BrokerCheck records Carlton has been the subject of at least five customer complaints and two judgments or liens. The customer complaints against Carlton allege a number of securities law violations including that the broker made unsuitable investments and misrepresentations among other claims.

The most recent customer complaint filed in October 2015 alleged unsuitable recommendations and concentrated positions in mutual funds, ETFs, and equity investments alleging losses of $1,264,355 in damages. The claim is still pending. Another claim was filed in January 2015 and alleged unsuitable concentrated positions in real estate limited partnerships and oil and gas stocks. In addition, Carlton has a tax lien of $132,060 that was filed in October 2014. Brokers are required to disclose financial matters that impact their personal finances. 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.

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