Articles Tagged with Summit Brokerage

shutterstock_66745735-300x200The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Darrach Bourke (Bourke), currently employed by Emerson Equity, LLC (Emerson Equity) has been subject to at least six customer complaints, five criminal disclosures, one employment termination for cause, and one regulatory matter during the course of his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Bourke’s customer complaints alleges that Bourke recommended unsuitable investments in various investments including allegations of concentrations in energy securities among other allegations of misconduct relating to the handling of their accounts such as unauthorized trading.

In March 2017 FINRA sanctioned Bourke finding that Bourke consented to sanctions and findings that he exercised discretion without written authorization in the accounts of two customers. FINRA found that Bourke discussed investment strategies with these customers and then Bourke exercised discretion and executed transactions in the accounts without first speaking with the customers about the specific transactions. FINRA found that Bourke had not obtained prior written authorization from the customers to exercise discretion in their accounts, and his member firm had not approved either account for discretionary trading.  FINRA fined Bourke $5,000 and suspended him for 20 business days.

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.

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shutterstock_186471755-300x200Advisor Marco Azizi (Azizi), currently employed by Centaurus Financial, Inc. (Centaurus) has been subject to at least four customer complaints during the course of his career.  According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have represented dozens of investors who suffered losses caused by these types of high risk, low reward products.

In September 2019 a customer complained that Azizi violated the securities laws by alleging that Azizi from 2012 through 2014, the customers allege that the Azizi facilitated unsuitable, high-risk and illiquid investments.  The claim is currently pending.

In October 2018 a customer complained that Azizi violated the securities laws by alleging that Azizi recommended unsuitable investments and several other allegations associated therewith.  The claim is currently pending.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments.  These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure.  Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds.  Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do.  Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors.  Continue Reading

shutterstock_184430612-300x225The law offices of Gana Weinstein LLP are currently investigating claims against broker Jeffrey Poosch (Poosch), currently associated with Summit Brokerage Services, Inc. (Summit Brokerage) out of Fort Gratiot, Michigan.  According to a BrokerCheck report, Poosch has been subject to at least four customer disputes during the course of his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Poosch’s customer complaints concern allegations of unauthorized trading and misrepresentations among other claims.

In February 2018 a customer filed a complaint alleging that Poosch made unauthorized trading and failed to disclose fees associated with a variable annuity.  The customer requested over $500,000 in damages.  The claim was denied.

In December 2016 a customer alleged that Poosch failed to disclose penalties to them.  The amount of damages was not specified.  The claim settled for $6,269.

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.

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shutterstock_185582-300x225Advisor Victor Rigoni (Rigoni), currently employed by Summit Brokerage Services, Inc. (Summit Brokerage) has been subject to at least three customer complaints.  According to a BrokerCheck report some of the customer complaints concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In October 2018 a customer filed a complaint alleging that Rigoni violated the securities laws by being recommended alternative investments causing breach of contract, fraud, misrepresentation, breach of fiduciary duty, and violation of FINRA rules. The claim alleges $125,000 in damages and is currently pending.

Rigoni is also the subject of multiple tax liens in amounts totaling over $50,000.  Large tax liens on a broker’s CRD can be a red flag that the broker may be influenced to engage in high commission activity in order to satisfy personal debts.  In addition, a broker’s inability to manage their own finances is relevant in a customer’s decision to use their services.

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shutterstock_186180719-300x216The investment lawyers of Gana Weinstein LLP are investigating the allegations made by The Financial Industry Regulatory Authority (FINRA) against barred broker Clay Hoffman. In June 2016, Hoffman was suspended by FINRA for his alleged failure to respond to FINRA’s request for information. Hoffman was later barred in November 2016 for his alleged failure to respond to multiple requests for documents and information related to an investigation.

Prior to the most recent suspension, Hoffman’s license as a broker was revoked and suspended, according to BrokerCheck. During May 2016, Hoffman alleged failed to pay a $5,000 fine for a previous case, which resulted in the revocation of his license. Additionally, Hoffman’s broker license was suspended during February 2016 due to the findings that allege that Hoffman engaged unauthorized business practices. Allegedly, Hoffman executed discretionary transactions in a customer’s account without any written authorization from the customer or firm.

In April 2015, a customer complaint was filed against Hoffman for alleged misrepresentation, unsuitability, and unauthorized trading. During his employment at SunTrust Investment and Summit Brokerage Services, Hoffman allegedly caused a loss for his client due to the misrepresentation of Mutual Funds. The alleged damages were $234,697.00 and the case settled at $90,000.

shutterstock_94127350The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker James Noto (Noto). According to BrokerCheck records Noto is subject to at least one regulatory sanction and seven customer complaints. The customer complaints against Noto allege securities law violations that claim unsuitable investments and lack of due diligence among other claims.  Many of the more recent claims involve the sale of Variable Annuity products.

The most recent complaint was filed in March 2016, and alleged that James Noto, while employed at Summit Brokerage Services (Summit), recommended an unsuitable investment in a variable annuity.  In 2015, another customer filed a complaint alleging that Noto made unsuitable investment recommendations.

Variable annuities are complex financial and insurance products.  In fact, recently the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing.  Essentially, a variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you.  The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen.  The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

shutterstock_101456704The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Craig Langweiler (Langweiler).  According to BrokerCheck records there are at least 36 disclosures on Langweiler’s record including customer complaints, multiple regulatory actions, multiple judgments or liens, and a criminal matter. The most recent customer complaints against Langweiler alleges a number of securities law violations including excessive commissions, churning, unauthorized trading, and suitability among other claims.

The most recent regulatory action against Langweiler by FINRA alleges that he willfully failed to amend his Form U4 to timely disclose federal tax liens, totaling approximately $143,000, and civil judgments, totaling approximately $56,700.  FINRA alleged that Langweiler also provided inaccurate and incomplete responses regarding liens and judgments to his employer and he provided inaccurate responses to FINRA.

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.

shutterstock_103079882The investment attorneys of Gana Weinstein LLP are investigating investor claims of unsuitable investments in oil and gas related products.  Our firm is currently representing a number of investors who lost substantial savings due to poor advice to concentrate holdings in speculative commodities investments like master limited partnerships (MLPs).  According to Brokercheck records, Andrew Yocum (Yocum) formerly with Morgan Stanley operating from their offices in The Villages, Florida has recently received at least 12 customer complaints with similar allegations that the broker overconcentrated them in oil and gas equities.  Eight complaints have been filed against Yocum in 2016 alone.

One of the most popular energy related investments that have become increasingly popular in the brokerage industry in recent years are MLPs.  MLPs are publicly traded partnerships. About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. There are about 130 MLPs trading on major exchanges that focus on energy related industries and natural resources.

Wall Street loves MLPs because they provide high yields to investors and require companies to pay Wall Street in order to continue to grow.  In 2013 banks earned fees of $890.3 million from MLP issuance.   Bloomberg quoted an analyst stating that “MLPs are Wall Street’s dream,” because “[t]hey’re fee machines.”  Naturally, in order to entice investors to continue to invest in MLPs Wall Street pumps up MLPs every chance they get.  According to Bloomberg, in May 2014 “[a]nalysts predict that 93 of the 114 MLPs in existence will rise in value in the next year…”  Astonishingly, “all but five MLPs are recommended by the majority of the analysts who cover them.”  At that time professionals without conflicts called MLPs “the next great investment debacle” and warned that “many MLP shareholders…may not understand what they’ve gotten into.”

The Financial Industry Regulatory Authority (FINRA) imposed a permanent bar against Gary J. Chackman (Chackman) concerning allegations that he recommended unsuitable transactions in the accounts of at least eight LPL Financial, Inc. (LPL) customers by over-concentrating the customers’ assets in real estate investment trusts (REITs).  Additionally, FINRA found that Chackman falsified LPL documents to evade the firm’s supervision by submitting dozens of “alternative investment purchase” forms that misrepresented customers’ liquid net worth.  FINRA found that by submitting falsified documents Chackman increased his customers’ accounts’ concentration in REITs and other alternative investments beyond the firm’s maximum allocation limits.

From December 2001, through March 2012, Chackman was registered through LPL.  On March 2012, LPL filed a Uniform Termination Notice for (Form U5) stating that Chackman was terminated for violating firm policies and procedures regarding the sale of alternative investments.  From March 2, 2012 through April 3, 2013, Chackman was registered through Summit Brokerage Services, Inc. (Summit). In April 2013, Summit filed a Form U5 terminating Chackman stating that the broker was operating a business out of an unregistered location.  According to Chackman’s BrokerCheck there have been at least five customer complaints filed against the broker.  Many of the complaints involve allegations of unsuitable REITs

According to FINRA, from July 2009 to February 2012, Chackman recommended REITs and other alternative investments to at least eight of his LPL customers.  FINRA found that Chackman purchased the REITs at periodic intervals in each of their accounts.  For example, in one customer’s account Chackman made seven purchases of a particular REIT, each for $75,000 over six months. After twelve months, FINRA found that 35% of the customer’s assets and more than 25% of her liquid net worth were invested in REITs and other alternative investments.  In order to evade LPL’s limitation on the concentration of alternative investments in customers’ accounts, FINRA found that Chackman misidentified his customers’ purported liquid net worth on LPL forms. FINRA found that over sixteen months and on seventeen alternative investment purchase forms Chackman tripled the customer’s purported liquid net worth.

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