Unauthorized Trading

Broker Investigation: VSR Financial Services Advisor Robert Hinz

December 16, 2015 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Robert Hinz Jr. (Hinz). There are at least 7 customer complaints against Hinz. The customer complaints against Hinz allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, fraud, breach of fiduciary duty, and unauthorized trading among other claims. One of the claims involves the purchase of oil and gas private placement Reef Oil & Gas Income and Development Fund III.

The most recent complaint was filed in February 2013 and alleged fraud and negligence from activities that occurred from July 2007 until December 2009 and resulted in $240,000 in damages. Another complaint filed in January 2012 alleged dissatisfied performance with respect to investments and asked for $34,680. The case was closed with no action.

Hinz entered the securities industry in January 1982. Since August 1994, Hinz has been registered with VSR Financial Services, Inc. out of the firm’s Seattle, Washington office location.

Gana LLP Investigation: Customer Complaints Against Howard Slater

December 13, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints against broker Howard Slater (Slater). In addition, The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2015046156301) against Slater. There are at least 18 customer complaints against Slater and 2 regulatory actions. The customer complaints against Slater allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, fraud, breach of fiduciary duty, and unauthorized trading among other claims.

The most recent customer complaint was filed in November 2013 and alleges unsuitable investments, fraud, and negligence concerning investments in alternative investments in real estate investments. The complaint seeks $90,000 in damages. In another complaint filed in July 2013, a customer complained that Slater misinformed her regarding the risks of three non-traded real estate investment trusts (Non-Traded REITs).

In a FINRA regulatory action against Slater, the agency alleged that in February 2008 and August 2008, Slater sent emails to two customers in connection with their purchases of IMH Secured Loan Fund, LLC (IMH Fund) that contained misrepresentations regarding the features of the IMH Fund. In addition, according to FINRA, in March 2008, Slater sent an email to a customer that contained exaggerated and misleading statements about the safety of the IMH Fund. Finally, FINRA found that in April 2008, Slater caused an SAI customer’s account records to reflect false annual income and net worth information that caused the business records maintained by his firm to be inaccurate.

Broker Investigation: Customer Complaints Against Frank Marinelli

December 8, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints against Frank Marinelli (Marinelli). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Marinelli has been the subject of at least 3 customer complaints, 1 employment termination, 2 judgment or liens, and 1 criminal matter. The customer complaints against Marinelli allege a number of securities law violations including that the broker made unsuitable investments, churning (excessive trading), misrepresentations, negligence, fraud, and unauthorized trading other claims.

The most recent customer complaint was filed in March 2014 and alleges unsuitable investments and churning causing $120,000 in damages. Another complaint filed in March 2012 alleges high pressure sales tactics unauthorized trading and mismanagement of the client’s account leading to $200,000 in damages.

Marinelli also has two liens listed, both filed in 2010 related to taxes. One lien is for $123,240 and the other is for $41,306. A broker with large liens are an important consideration for investors to weigh when dealing with a financial advisor. An advisor may be conflicted to offer high commission investments to customers in order to satisfy liens and debts that may not be in the client’s best interests.

FINRA Sanctions Daniel Barthole Over Attempt to Privately Settle a Customer Complaint

December 7, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2012034393401) against broker Daniel Barthole (Barthole) resulting in a monetary sanction and a suspension. In addition, according to the BrokerCheck records kept by FINRA, Barthole has been the subject of at least 2 customer complaints. The customer complaints against Barthole allege unsuitable investments, churning (excessive trading), misrepresentations, fraud, and unauthorized trading among other claims. The most recent complaint against Barthole alleged $227,632 in damages concerning unauthorized ETF trading and churning from February 2012 through September 2014. The claim was later withdrawn.

FINRA’s findings stated that Barthole consented to a finding that he together with two other brokers attempted to settle a customer complaint away from their brokerage firm by agreeing to pay $4,000 to a customer and by sending $1,500 in cash to the customer.

Barthole entered the securities industry in 2009. From April 2009 until February 2015, Barthole was associated with Woodstock Financial Group, Inc. Since February 2015, Barthole has been registered with National Securities Corporation out of the firm’s New York, New York office location.

FINRA Bars Broker Jeffrey Snyder Over Failure to Respond to Regulator Requests

December 3, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought and enforcement action (FINRA No. 2015045289901) against broker Jeffrey Snyder (Snyder) resulting a permanent bar from the securities industry. In addition, according to the BrokerCheck records kept by FINRA, Snyder has been the subject of at least 6 customer complaints, and 1 regulatory event. The customer complaints against Snyder allege a number of securities law violations including that the broker made unsuitable investments, engaged in churning (excessive trading), misrepresentations, negligence, fraud, and unauthorized trading other claims.

FINRA’s findings stated that although Snyder appeared for an on-the-record interview, he refused to respond to certain questions concerning allegations that he paid a customer compensation for investment losses without the knowledge or authorization of his member firm. Snyder’s refusal resulted in an automatic bar.

An examination of Snyder’s employment history reveals that Snyder 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 Snyder’s 12 year career he has worked at 6 different firms. Snyder entered the securities industry in 2003. From February 2006, through June 2008, Snyder was associated with New Castle Financial Services LLC. Thereafter from June 2008 until August 2008, Snyder was a registered representative of The Concord Equity Group, LLC. From August 2008, until April 2012, Snyder was registered with Spartan Capital Securities, LLC. From April 2012 until April 2015, Snyder was associated with Rockwell Global Capital LLC. Finally, in March 2015, Snyder was registered with Network 1 Financial Securities Inc. until September 2015 out of the firm’s Danbury, Connecticut office location.

Broker Investigation: Oppenheimer Advisor Luigi Mancusi

November 24, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Luigi Mancusi (Mancusi) has been the subject of at least 4 customer complaints. The customer complaints against Mancusi allege securities law violations that claim unauthorized trading, unsuitable investments, misrepresentations, failure to supervise, and breach of fiduciary duty among other claims. The most recent complaint was filed in July 2015, and alleged $250,000 in losses due to unauthorized trading from November 2012 through November 2014. Another complaint was filed in July 2013 where the client alleged fraud and unsuitable investments given the client’s age, risk tolerance, and income need. The claimant alleged $322,000 in damages.

Mancusi entered the securities industry in 1992. From November 2002, until October 2012, Mancusi was associated with Wayne Hummer Investments L.L.C. From September 2012, onward Mancusi has been associated with Oppenheimer & Co. Inc. Mancusi is also associated with David A. Noyes & Company out of the firm’s Lake Forrest, Illinois branch 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: Financial Advisor Mark Hughes

November 23, 2015 | by Staff Attorney

The attorneys at Gana Weinstein LLP are interested in speaking with investors of broker Mark Hughes (Hughes) According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Hughes has been the subject of at least 7 customer complaints, and 1 regulatory action over the course of his career. The customer complaints against Hughes allege securities law violations that claim excessive trading, unsuitable investments, and unauthorized trading among other claims. The most recent complaint was filed in November 2011, and alleged $500,000 in losses due to unsuitable variable annuities.

The most recent regulatory action was taken by the state of Virginia in 2010, when the state alleged that Hughes violated the states laws by offering and selling leveraged exchanged traded funds (Non-Traditional ETFs) to two Virginia residents when the investment was not suitable for them given their investment objectives, financial situation, risk tolerance, experience, and investment needs. The allegations were settled with the state and resulted in sanctions of $620,000 and the imposition of heightened supervision.

Hughes entered the securities industry in 1993. From June 2004, until November 2007, Hughes was associated with Suntrust Investment Services Inc. From October 2007, until November 2014, Hughes was associated with UBS Financial Services Inc. Presently, Hughes is associated with Oppenheimer & Co. Inc. out of the firm’s Washington, DC branch office location.

Broker Investigation: Laidlaw & Company Advisor Joseph Fedorko

November 19, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Joseph Fedorko (Fedorko) has been the subject of an astonishing 16 customer complaints. The customer complaints against Fedorko allege securities law violations that claim churning and excessive trading, unsuitable investments, unauthorized trading, fraud, misrepresentations, and breach of fiduciary duty among other claims. The most recent complaint was filed in March 2014, and alleged $292,771 in losses due to an unsuitable investment strategy from 2011 until 2013. The case settled for $120,000. Another complaint filed in November 2012, alleged $400,000 in damages stemming from trading that began in 2011. Other complaints against Fedorko when combined allege millions in investor losses.

Fedorko entered the securities industry in 1989. From January 2002, until May 2009, Fedorko was associated with with Oppenheimer & Co. Inc. Presently, Fedorko is associated with Laidlaw & Company (UK) Ltd. out of the firm’s Stamford, Connecticut branch 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: Feltl & Company Advisor Timothy Wynne

November 19, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Timothy Wynne (Wynne) has been the subject of at least 5 customer complaints. The customer complaints against Wynne allege securities law violations that claim churning and excessive trading, unsuitable investments, unauthorized trading, fraud, misrepresentations, and discretionary trading among other claims. The most recent complaint was filed in October 2014, and alleged $500,000 in losses due to churning and excessive commission charges from February 2012 through October 2014. Another complaint filed in July 2014, alleged over $3.3 million in damages caused by unsuitable discretionary trading. Another complaint also filed in July 2014 alleged unsuitable investments in Monticello MN Telecommunication municipal bonds.

Wynne entered the securities industry in 1986. From January 2002, until February 2012, Wynne was associated with with Oppenheimer & Co. Inc. Presently, Wynne is associated with Feltl & Company out of the firm’s Minneapolis, Minnesota branch 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.

Broker Investigation: Oppenheimer Advisor Matthew Giannone

November 18, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Matthew Giannone (Giannone) has been the subject of at least 6 customer complaints. The customer complaints against Giannone allege securities law violations that claim churning and excessive trading, unsuitable investments, unauthorized trading, fraud, misrepresentations, and inappropriate loans among other claims. The most recent claim filed against Giannone claims $1,200,000 in damages due to churning and an inappropriate loan. The complaint was denied and closed.

Giannone entered the securities industry in 1997. From June 1997, until June 2005, Giannone was associated with Citigroup Global Markets Inc. From May 2005, until March 2013, Giannone was associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated. Finally, since May 2013, Giannone has been registered with Oppenheimer & Co. Inc. out of the firm’s New York, New York branch 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.