Geneos Broker Barred For Not Cooperating With FINRA Investigation

Bradley Joseph Tennison (CRD#: 1561988), who is a previous registered representative of Geneos Wealth Management, Inc., consented to Financial Industry Regulatory Authority (“FINRA”) barring him in all capacities according to Tennison’s submission of a Letter of Acceptance, Waiver and Consent No. 2018058302101, accepted by FINRA on July 2, 2018. FINRA stated that Tennison failed to comply with FINRA’s investigation concerning his possible misconduct in the securities industry.

After Geneos Wealth Management’s April 2018 termination of Tennison’s registration, FINRA began an investigation into Tennison’s possible sales practice violations. FINRA’s investigation centered in on Tennison seemingly recommending for a customer to invest $300,000 away from the firm. Tennison apparently failed to provide FINRA with documentation and information in the time of FINRA’s investigation. FINRA also found Tennison uncooperative when Tennison’s testimony was requested. Apparently, Tennison retained legal counsel, who contacted FINRA in June 2018 to state that Tennison would not testify in FINRA’s investigation. FINRA stated that Tennison violated FINRA Rules 8210 and 2010 because of failing to cooperate.

FINRA BrokerCheck indicates that Geneos Wealth Management discharged Tennison after a customer complained about Tennison’s investment recommendations. According to Geneos Wealth Management, Tennison failed to fully cooperate with the firm’s investigation into his possible unsuitable recommendations.

Customers of First Allied Securities and Geneos Wealth Management Inc. have filed disputes concerning Tennison’s sales practices. Records show that a First Allied Securities customer filed NASD arbitration #02-04176 on January 13, 2003, asserting claims against Tennison of breach of fiduciary duty and unsuitability in connection with the customer’s equity investments. The arbitration was settled for $79,380.00 in damages on March 16, 2004.

The second dispute was filed by a Geneos Wealth Mangement Inc. customer on March 4, 2010, who alleged that Tennison gave the customer bad advice regarding limited partnership investments. Tennison agreed to provide the customer $10,000.00 to settle the matter. And on April 24, 2018, a Geneos Wealth Mangement Inc. customer filed a complaint asserting that Tennison advised the customer to invest $300,000.00 away from the firm. According to the customer, the investment was supposed to have matured after one year; however, Tennison did not return the customer’s principal. At least $300,000.00 in damages has been demanded by the customer in the pending matter.

Investors who have lost money by investing with Geneos Wealth Mangement brokers such as Bradley Joseph Tennison should consider contacting the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation regarding their legal rights and claims. Peter M. Spett is experienced at recovering investor losses.

Independent Financial Group Rep Barred For Unsuitable Sales

Kyusun Kim (CRD #: 2864085), who is a previous registered representative of Independent Financial Group, LLC (San Diego, California) consented to Financial Industry Regulatory Authority (“FINRA”) barring him in all capacities according to Kim’s submission of a Letter of Acceptance, Waiver and Consent #: 2017052705001, accepted by FINRA on June 6, 2018. Kim was found liable for making unsuitable investment recommendations.

FINRA stated that when Kim worked for Independent Group, he advised several customers to liquidate their 401(k) and pension plans, and transfer those funds to Independent Financial Group accounts so that the customers would invest with Kim. Kim had apparently recommended for customers to invest in alternative investments including non-traded REITS and structured notes.

The AWC showed that Kim’s customers were inexperienced investors who had conservative or moderate investment objectives and risk tolerances. The AWC stated that Kim’s recommendations were unsuitable because those alternative investments did not provide customers with liquidity, and were not consistent with the customers’ objectives and risk tolerances.

In the AWC, FINRA referred to more than one situation where Kim advised elderly customers to invest a large portion of their liquid net worth in the alternative investments. FINRA also stated that when Kim made those recommendations, he failed to disclose the risks. The AWC reported that Kim’s customers incurred significant losses. As a result, FINRA stated that Kim violated NASD Rules 2310 and 2110 and FINRA Rules 2111 and 2010.

Kim has reported that at least 23 Independent Financial Group, LLC customers have disputed his sales practices. Customers have brought claims of breach of fiduciary duty, breach of contract, unsuitable investments, violation of federal and state laws, financial elder abuse, negligence, misrepresentation, and fraud. So far, 13 of those customer disputes have been settled for a total of $2,995,443.00 in damages, while 9 customer disputes are pending.

The Law Office of Peter M. Spett is experienced in representing investors in cases of unsuitable investment recommendations, fraud, negligence, and the failure of brokerage firms to supervise their financial advisors. If representatives such as Kyusun Kim have traded in your account in an inappropriate manner, contact Peter M. Spett at (888) 217-4919 for a free consultation concerning the possible recovery of your investment losses.

Laidlaw & Company Customer Alleges Excessive Trading

Craig Aaron Bonn (CRD #: 2280460), who was previously a registered representative of Laidlaw & Company (UK) Ltd. located in New York New York, has disclosed on Financial Industry Regulatory Authority (“FINRA”) BrokerCheck that a Laidlaw customer filed FINRA Arbitration #18-02628 on August 29, 2018, alleging excessive trading and unsuitability.

Bonn’s BrokerCheck records show that the customer alleged Bonn to have made unsuitable stock trades, and traded excessively in the customer’s account between 2008 and 2016. At least $228,128.47 in damages have been requested by the customer as a result of Bonn’s alleged sales practice violations.

In addition, Bonn also disclosed that FINRA Arbitration #14-00033 was filed by a Laidlaw customer on January 17, 2014. Bonn was accused of giving the customer poor advice regarding equities and limited partnership interests or direct participation programs. Laidlaw resolved the customer’s allegations by paying the customer $325,000.00 in damages.

On March 23, 2004, Bonn was alleged in a complaint to have made unsuitable investments in the account of a Sands Brothers & Co. customer. The customer alleged that it was inappropriate for the customer to have been placed in certain equities. That complaint has not been pursued by the customer as of August 6, 2004.

Bonn is presently a registered representative of National Securities Corporation.

If you believe you are a victim of sales practice violations such as those alleged to have been committed by Craig Aaron Bonn, contact the Law Office of Peter M. Spett for a complimentary consultation to evaluate your legal rights and claims.

Ameriprise’s Michael Dellaporta Terminated For Unauthorized Trading

Michael Joseph Dellaporta Jr. (CRD #: 500214), who previously was a registered representative of Ameriprise Financial Services, Inc. in Fort Lauderdale, Florida (September 10, 2010 to June 23, 2015), has divulged through Financial Industry Regulatory Authority (“FINRA”) BrokerCheck that Ameriprise discharged him as a result of Dellaporta’s failure to follow Ameriprise’s policies relating to trading in its customers’ investment accounts.

Ameriprise alleged that Dellaporta was discharged for violating the company’s policies. According to Ameriprise, Dellaporta exercised discretion in customer accounts without obtaining authorization. He was also alleged to have steered customers to effect fixed income securities transactions despite those securities not being approved by Ameriprise. In addition, Ameriprise alleged that Dellaporta solicited option trades at volumes that were prohibited by the firm, and falsely disclosed that his trades were not solicited.

At least three Oppenheimer & Co. Inc. customers and one Ameriprise customer have contested Dellaporta’s sales practices by filing investment-related disputes. The first dispute concerns an Oppenheimer customer who filed a complaint on July 20, 2009, claiming unsuitability and unauthorized trading. That customer alleged that there was an over-concentration of financial preferred securities in the customer’s account.

Apparently, the allocation of stocks in the customer’s account was not suitable because it conflicted with the customer’s risk tolerance. In addition, the customer claimed that an investment strategy selected for the customer’s account was switched without the customer’s permission, and unauthorized investments held in the customer’s account led the customer to experience losses. On August 14, 2009, Oppenheimer agreed to pay the customer $150,000.00 in order to settle the claim.

Next, a FINRA arbitration #11-03266 was filed by an Oppenheimer customer on September 13, 2011, who alleged that trades were unsuitable and excessive. Apparently, the inappropriate and unwarranted transactions concerned mutual funds, stock, direct investments, corporate-debt and municipal-debt products. The arbitration was settled for $52,500.00 in damages on October 4, 2012.

A third Oppenheimer customer brought FINRA arbitration #13-02086, claiming that trades were excessively placed on margin, and the investments were unsuitable. A settlement was reached on November 18, 2016, under which the customer was paid $375,000.00.

On December 29, 2016, FINRA arbitration #16-03636 was filed by a customer of Ameriprise Financial Services, Inc. The customer stated that securities had been purchased for the customer’s account without consent from the customer. Moreover, according to the customer, recommendations of sub-par collateralized mortgage obligations were inappropriate, and the selection of those investments led the customer’s account to be over-concentrated in unsuitable investments. Ameriprise resolved the customer’s matter for $150,000.00.

Since being discharged from Ameriprise, Dellaporta has worked for Fusion Analytics Securities LLC (August 28, 2015 – August 13, 2018) and B.B. Graham & Company, Inc. (August 10, 2018 – present).

If you have suffered losses as a result of investing with a broker from Ameriprise or Oppenheimer such as Michael Joseph Dellaporta Jr., call the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation concerning your legal rights and claims. Peter M. Spett has extensive experience recovering investor losses.

SunTrust Settles Customers' Claims Of Unauthorized Trading

Daniel Antonio Pacheco (CRD#: 5278626), who was a prior financial advisor of SunTrust Investment Services, Inc. in Hollywood, Florida from January 19, 2016 to April 14, 2016, has disclosed on Financial Industry Regulatory Authority (“FINRA”) BrokerCheck that a customer filed a FINRA Arbitration #17-02124 on September 13, 2017, asserting a claim against Pacheco of unsuitability.

The customer indicated that Pacheco misrepresented the customer’s suitability profile – documentation which generally refers to an investor’s risk tolerance, investment objectives, and financial status. The customer asserted that Pacheco also placed the customer in equities, including common or preferred stock, that were not suitable for the customer. SunTrust and the customer agreed for the customer to be paid $35,000.00 to settle the claim.

At least three other SunTrust customers have come forward disputing Pacheco’s sales practices, according to Pacheco’s FINRA BrokerCheck file. In one customer dispute filed on December 14, 2015, a customer alleged that Pacheco made stock trades in the customer’s account without the customer’s permission. On December 18, 2015, SunTrust settled that customer’s claim of unauthorized trading.

In another customer complaint filed January 15, 2016, Pacheco was accused of providing the customer written confirmation that the customer’s account value would not fall below $485,000.00. Apparently, the promise made by Pacheco was left unfulfilled. The customer also alleged that Pacheco was supposed to have contacted the customer if the customer sustained more than three percent losses on mutual funds and equity investments; however, Pacheco failed to communicate with the customer. On February 24, 2016, SunTrust settled the customer’s dispute by paying $35,000.00 in damages.

Another SunTrust customer filed a complaint on January 22, 2016, claiming that Pacheco made unauthorized trades of stock in the customer’s account. Pacheco was additionally accused of buying securities for the customer’s account that did not match the customer’s risk tolerance. Records show that the customer was provided $28,740.65 by SunTrust on April 18, 2016 to resolve the customer’s allegations of unsuitability and unauthorized trading.

Investors who have lost money by investing with SunTrust financial advisors such as Daniel Antonio Pacheco are welcome to contact the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation regarding their legal rights and claims. Peter M. Spett is experienced at recovering investor losses.

SEC Alleges Morgan Stanley Advisers Committed Securities Fraud

The Securities and Exchange Commission (“SEC”) filed a Complaint in the United States District Court for the District of Massachusetts, charging James S. Polese (CRD #:2636427) and Cornelius Peterson (CRD #: 5769919), both prior investment advisers of Morgan Stanley in Boston, Massachusetts, with defrauding several customers and stealing their assets. The Securities and Exchange Commission vs. James S. Polese and Cornelius Peterson [Case 1:18-cv-10186, Filed January 31, 2018]. The United States Attorney’s Office also filed a parallel action, in which Peterson and Polese were charged with investment adviser fraud, bank fraud, conspiracy and identify theft.

The SEC’s Complaint alleged that between August 2014 and May 2017, Peterson and Polese participated in a fraudulent scheme, part of which involved an elderly client’s $450,000.00 in assets being stolen. Peterson and Polese allegedly misappropriated $350,000.00, where $100,000.00 had been used by them to invest in their personal accounts, with the remainder directed to a bank account controlled by Polese.

The Complaint also stated that between March 2017 and May 2017, a number of unapproved withdrawals totaling $93,000.00 had been executed by Polese from the elderly client’s account to pay Polese’s childrens’ college tuition and Polese’s credit cards.

The Complaint additionally alleged that Peterson and Polese breached fiduciary duties to their customers. Particularly, unbeknownst to customers, Peterson and Polese invested the funds of their customers in investments that Peterson and Polese maintained a financial stake. Peterson and Polese also mysteriously used the assets belonging to a customer to secure a loan for purposes of financing an entity that Peterson and Polese invested in. Further, two customers had been defrauded by Polese when he procured a loan from a customer under terms that were not beneficial to the customer, and charged another customer fees that were 50% greater than what the customer and Polese had previously agreed upon.

The SEC alleged that Peterson and Polese violated Section 10(b) of the Exchange Act; Rule 10b-5; Section 206 of the Advisers Act; and aided and abetted Section 204 of the Advisers Act. SEC sought civil penalties, permanent injunctions and disgorgement of Polese’s and Peterson’s ill-gotten gains.

While Polese’s fate is yet to be determined, on January 31, 2018, Peterson pled guilty to investment adviser fraud, conspiracy, and bank fraud. United States v. Cornelius Peterson, Crim. Information No. 1:18-cr-10027. Subsequently, on July 17, 2018, Peterson consented to the SEC’s Order Instituting Administrative Proceeding Pursuant to Section 15(b) of the Exchange Act and Section 203(f) of the Advisers Act, Making Findings, and Imposing Remedial Sanctions, under which SEC barred Peterson from acting as a broker or investment adviser or associating with firms that sell securities or provide the public with investment advice.

Polese and Peterson have disclosed on FINRA BrokerCheck that customers have filed disputes alleging Polese’s and Peterson’s sales practices violations. On My 26, 2017, two Morgan Stanley Smith Barney customers filed complaints alleging Polese misrepresented fees charged in their managed accounts between January 2015 and May 2017. One of those complaints was settled for $33,260.00 in damage; the other is pending.

On November 7, 2017, a customer filed arbitration #17-02954, alleging that Peterson and Polese misappropriated the customer’s assets. The arbitration is still ongoing. And on May 21, 2018, a Morgan Stanley customer demanded $136,500.00 in damages as a result of Polese’s alleged unauthorized stock trading.

Prior to the SEC’s Complaint, Morgan Stanley discharged Peterson and Polese on June 26, 2017, citing allegations of misappropriation of customer assets. In addition, on September 1, 2017, Financial Industry Regulatory Authority (“FINRA”) barred Peterson and Polese in all capacities for failing to respond to FINRA’s request for their information.

If you believe that you are a victim of investment-related misconduct committed by Cornelius Peterson or James S. Polese, contact the Law Office of Peter M. Spett at (561) 463-2799 for a complimentary consultation to evaluate your legal rights and claims. Peter M. Spett has extensive experience recovering losses for investors.

Customers Allege Oppenheimer Committed Fraud

Gregory Baines Iglow (CRD#: 2783963), who has been a registered representative of Oppenheimer & Co. Inc. (Los Angeles, California), disclosed on Financial Industry Regulatory Authority (“FINRA”) BrokerCheck that he is referenced in a July 11, 2018 FINRA arbitration #18-02493. The Oppenheimer customer raised allegations of negligent supervision, breach of fiduciary duty, breach of contract, common law fraud, omissions, misrepresentation, unsuitability, violation of California’s Elder Abuse statutes, and violation of California Securities Act. The customer’s claims of misconduct pertain to investments in Puerto Rican bonds. A total of $300,000.00 in damages has been alleged by the customer in the pending matter.

According to FINRA BrokerCheck, allegations of Iglow’s sales practice violations are referenced in seven consumer-initiated, investment-related disputes. According to two July 17, 2014 complaints, customers of Oppenheimer alleged that omissions were made about municipal debt investments when they were purchased by the customers. The customers also contended that the investments were inappropriate given the customers’ ages and health conditions. The customers demanded a combined $324,482.90 in damages. Oppenheimer denied the customers’ allegations.

On December 17, 2009, civil suit #BC427035 was filed by an Oppenheimer customer concerning Iglow’s sales practices. Apparently, the customer contended that auction rate securities had been misrepresented, and omissions were made regarding those securities. The customer’s matter was settled for a total of $3,164,250.00 in damages on March 16, 2011.

Additionally, a consumer-initiated arbitration #09-05195 was filed on October 12, 2009. A customer who held assets with RBC Capital Markets Corporation and Oppenheimer accused Iglow of placing the customer in unsuitable corporate bonds. Apparently, the issuer of those bonds filed for bankruptcy, causing the customer to sustain losses. On May 14, 2010, the arbitrator found Iglow liable for negligence, omission of facts, non-disclosure, misrepresentation, breach of fiduciary duty, fraud and unsuitability. The arbitrator ordered Iglow to pay the customer $17,121.00 in damages.

In a March 6, 2009 complaint, an Oppenheimer customer alleged that Iglow was dishonest with the customer in reference to the customer’s Fannie Mae corporate debt investments. The customer’s claim was denied by Oppenheimer on April 15, 2009. Iglow was additionally subject of an April 7, 2003 complaint where a Prudential Securities Incorporated customer claimed that Black Rock Income Municipal Income Trust Fund investments had been misrepresented. Prudential Securities Incorporated denied the customer’s matter on May 16, 2005.

If you have suffered losses as a result of investing with Gregory Baines Iglow or another Oppenheimer broker, call the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation concerning your legal rights and claims. Peter M. Spett has extensive experience recovering investor losses.

Customer Files Suit Against Paulson Investment Company For Securities Fraud

Michael Patrick Nixon (CRD# 2169631), who has been a registered representative of both Newport Coast Securities, Inc. (Leesburg, VA) and Paulson Investment Company, LLC (Tampa, FL), disclosed on Financial Industry Regulatory Authority (“FINRA”) BrokerCheck that he is named in a July 9, 2018 FINRA Arbitration #18-02421 where several customers alleged that Nixon committed securities fraud. The customers are reportedly seeking $3,000,000.00 in damages because of Nixon’s fraudulent activities.

The customers’ claims included the violation of Florida Securities Act and the Virginia Securities Act; a breach of fiduciary duties; unsuitable securities recommendations; inadequate supervision of the transactions effected in the customers’ accounts; and the breach of contractual terms. Apparently, those claims of sales practice violations concerned the customers’ investments in corporate debt products during the period that Nixon was employed by both Paulson Investment Company, LLC and Newport Coast Securities, Inc. The arbitration is pending a resolution.

Another customer arbitration, National Association of Securities Dealers (“NASD”) Arbitration #98-03927 was disclosed on Nixon’s FINRA BrokerCheck file. A customer of American Frontier Financial Corporation (formerly known as RAF Financial Corp.) alleged that Nixon engaged in deceitful conduct; misrepresented information about investments; failed to supervise the customer’s stock transactions; breached fiduciary duties; and violated NASD rules.

Nixon has a history of working for brokerage firms that FINRA has expelled, including Dickinson & Co. (expelled April 7, 1998); Jesup & Lamont Securities Corp. (expelled November 4, 2010); Empire Financial Group, Inc. (expelled March 30, 2009); Meyers Associates, L.P. (expelled May 29, 2018); and Newport Coast Securities, Inc. (expelled June 25, 2018).

Nixon’s employment with Newport Coast Securities, Inc. ended on January 6, 2016. He has been with Paulson Investment Company LLC since December 4, 2015.

If you have suffered losses because of Michael Patrick Nixon, call the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation concerning your legal rights and claims. Peter M. Spett has extensive experience recovering investor losses.

Morgan Stanley Broker Terminated For Alleged Outside Business Activities

Michael Schuchman (CRD :# 4437315), who was registered as a general securities representative of Morgan Stanley between June 1, 2009 and June 14, 2018, has voluntarily resigned based on allegations made by Morgan Stanley concerning Schuchman’s possible engagement in outside business activities without notifying the firm as required by the firm’s policies.

FINRA BrokerCheck disclosed that several of Schuchman’s past customers have filed disputes regarding his sales practices. Most recently, Schuchman has been referenced in a pending consumer-initiated, investment-related arbitration from July 2, 2018 in which the customers alleged that Schuchman excessively traded in their accounts between May 2014 and July 2017, during which time Schuchman was employed by Morgan Stanley Smith Barney. (Case #: 18-02223). The complaint is pending.

Another consumer arbitration regarding Schuchman’s conduct had been filed on August 3, 2017. The arbitration concerned a Morgan Stanley customer who alleged that structured products, exchange-traded funds and equities transactions effected in the customer’s account between 2011 and 2017 were not suitable for the customer. That complaint is pending.

In addition, on December 15, 2014, a consumer brought a complaint alleging that that commissions on options and equity investments had been misrepresented to the customer. The customer’s complaint was resolved on May 11, 2015.

If you have suffered losses due to the sales practice violations of Schuchman or another Morgan Stanley broker or financial adviser, call the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation concerning your legal rights and claims. Peter M. Spett has extensive experience recovering investor losses.

Wells Fargo’s Laura Cava Barred For Disregarding FINRA Requests

Laura Ann Cava (CRD #: 5092233) has been a registered representative of Wells Fargo Clearing Services, LLC (Lehigh Acres, Florida) between April 11, 2006 and May 5, 2017. Financial Industry Regulatory Authority (“FINRA”) barred Cava in all capacities on October 23, 2017, citing allegations that Cava failed to respond to FINRA’s request for information. FINRA may have been inquiring into Cava’s activities for possible violations of FINRA rules.

Particularly, Cava did not leave Wells Fargo Clearing Services on a good note. She was discharged on May 5, 2017 for allegedly violating company policy by borrowing from several banking customers. FINRA Rule 3240 precludes borrowing arrangements between customers and registered representatives absent the borrowing arrangement meeting certain criteria.

FINRA indicated on Cava’s FINRA BrokerCheck page that Cava was suspended in all capacities on August 11, 2017 for failing to respond to FINRA’s request for information. Cava was provided approximately three months to comply with FINRA’s requests or otherwise seek that her suspension be terminated. Since Cava failed to provide FINRA with the required information by October 22, 2017, she was automatically barred on October 23, 2017. (FINRA Action #: 2017054338601)

If you have suffered losses due to the misconduct of your Wells Fargo broker or financial adviser, call the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation concerning your legal rights and claims. Peter M. Spett has extensive experience recovering investor losses.

Merrill Lynch Customers Sue Over Unsuitable Puerto Rican Bonds

Jose E. Gonzalez Pumarada (CRD #: 1571751) is a general securities representative of Merrill Lynch, Pierce, Fenner & Smith Incorporated (Guaynabo, Puerto Rico). FINRA BrokerCheck disclosed that Pumarada is subject of a pending consumer-initiated, investment-related arbitration from October 19, 2017 containing allegations against Pumarada of sales practice violations. The Merrill Lynch customer alleged in the October 19, 2017 arbitration that she was placed in Puerto Rican municipal bonds and closed-end funds that were both unsuitable and misrepresented. At least $250,000.00 in damages has been alleged by the customer. (Case #: 17-02713).

According to FINRA BrokerCheck, allegations of Pumarada’s sales practice violations are referenced in four previous consumer-initiated, investment-related disputes. The first one was a complaint filed by a Salomon Smith Barney customer on February 6, 2001, alleging that the customer’s instructions concerning options investments had not been followed. The customer also alleged that unauthorized options had been purchased for the customer’s account. Salomon Smith Barney denied the complaint on February 6, 2001.

Then, a Merrill Lynch customer filed an arbitration on June 25, 2014, alleging that unsuitable investment recommendations were made concerning the customer’s investments in municipal debt and closed-end funds. Moreover, the customer claimed that there were misrepresentations and omissions of information relating to her investments. Merrill Lynch settled the customer’s complaint for $15,000.00 on March 22, 2016. (Case #: 14-01828)

On September 22, 2015, another customer of Merrill Lynch brought an arbitration alleging omissions and misrepresentations of facts between October 2009 and September 2015 concerning municipal debt and closed-end funds. The customer claimed to have received unsuitable investment recommendations. The arbitration was settled on February 23, 2018 for $50,000.00.

Are you a victim of sales practice violations committed by Jose E. Gonzalez Pumarada or another broker or financial advisor? If so, contact The Law Office of Peter M. Spett at (561) 463-2799 for a free consultation regarding your legal rights and claims.

Customer Alleges National Planning Corporation Provided Poor Advice

Nancy Ellen Biddle (CRD #: 2134532) is a general securities representative who was registered with National Planning Corporation (St. Pete Beach, Florida) between June 19, 2006 and October 24, 2017. FINRA BrokerCheck discloses that Biddle has been subject of consumer-initiated, investment-related complaint from March 17, 2017 containing allegations against Biddle of poor investment advice while registered with National Planning Corporation. The customer alleged that Biddle made unsuitable recommendations concerning the purchase and liquidation of real estate investment trusts, causing the customer to experience damages exceeding $5,000.00.

According to FINRA BrokerCheck, this is the fifth consumer-initiated, investment-related dispute in which Biddle’s sales practices have been called into question. The first complaint was filed by a customer of Locus Street Securities who alleged that real estate investment trust purchases were not suitable given the customer’s age and liquidity needs. In addition, that customer alleged that the account was over-concentrated in real estate investment trusts. The complaint was settled on February 25, 2005 for $171,668.40 in damages.

The second complaint was filed on May 2, 2006, concerning a customer of ING Financial Partners, Inc. who alleged that there were unauthorized stock trades made in the customer’s investment account. The customer demanded $150,000.00 in damages. ING Financial Partners, Inc. denied the complaint on May 11, 2006. The third complaint dated May 9, 2013 involved a National Planning Corporation customer who alleged that a variable annuity was unsuitable for the customer. The firm stated that the customer’s alleged damages are greater than $5,000.00.

Another National Planning Corporation customer brought an arbitration on July 14, 2015, alleging negligence, breach of contract, breach of fiduciary duty and violation of FINRA and NASD rules in connection with the customer's real estate security holdings. National Planning Corporation agreed to pay the customer $12,500.00 to resolve the matter.

On October 18, 2017, Biddle became registered with FSC Securities Corporation in St. Pete Beach, Florida.

If you have incurred investment losses from Nancy Ellen Biddle, call the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation concerning your legal rights and claims. Peter M. Spett has extensive experience recovering losses for investors who have been sold unsuitable securities by their brokers or advisors.

Advisor Group Firms Fined For Failure To Supervise Annuity Sales

The Advisor Group Firms (FSC Securities Corporation, SagePoint Financial, Inc., Royal Alliance Associates, Inc. and Woodbury Financial Services, Inc.) consented to being fined and censured by Financial Industry Regulatory Authority (FINRA) according to their submission of a Letter of Acceptance, Waiver and Consent #: 2016047636601, accepted by FINRA on July 24, 2018. FINRA found that the Advisory Group Firms failed to reasonably supervise sales of multi-share class variable annuities.

The AWC stated that SagePoint, FSC and Woodbury (from January 2013 to December 2014) and Royal Alliance (from February 2014 to December 2015) sold variable annuity contracts with the choice of different share classes, which included B-share contracts and L-share contracts.

B-share contracts – the most common share class sold to customers – contain lower fees than L-share contracts but longer surrender periods. Customers typically pay up to 50 basis points more for L-shares in return for increased liquidity. FINRA Department of Enforcement indicated that suitability concerns could arise when L-share contracts are sold to customers who have indicated their plans to hold their investment on a long-term basis. Those concerns, according to FINRA, become more obvious when an L-share contract is purchased with a long-term rider (e.g. Guaranteed Minimum Withdrawal Benefit or Guaranteed Minimum Income Benefit) since those riders require the annuity to be held by the customer for at least five years, if not longer, to provide the customer with the complete benefit.

FINRA stated in the AWC that the Advisor Group Firms had to comply with Rule 2330’s standards, which preclude a registered representative from recommending that a variable annuity be purchased or exchanged unless the representative has a reasonable basis to believe that: the customer has been provided information about the variable annuities’ features, surrender periods, fees, expenses and tax implications; the customer would derive a benefit from some of the variable annuities’ features (e.g. tax-deferral, a guaranteed income stream, or a death benefit); and that the selected variable annuity and rider(s) are suitable for that customer.

The AWC detailed the Advisor Group Firms’ failure to establish and enforce a supervisory systems and written supervisory procedures constructed to ensure registered representatives conformed to Rule 2330. According to the AWC, the procedures failed to identify suitability issues concerning the various surrender periods, costs and fees of the share classes. There was apparently no mention of the suitability issues within the Advisor Group Firms’ procedures concerning L-share contracts being sold with long-term income riders or sold to customers with long-term investment horizons. FINRA cited the Advisor Group Firms for failing to address within their written supervisory procedures any instances in which further scrutiny was justified in the mandated principal review and approval stage due to the suitability issues stemming from the selected variable annuity share class.

The AWC stated that registered representatives and principals were also not provided sufficient training by The Advisor Group Firms to ensure that the variable annuity features were understood. The Advisor Group Firms, according to the AWC, used training modules that were not constructed to confirm that registered representatives and principals understood suitability concerns stemming from L-share contracts being sold with long-term income riders or sold to customers with long-term investment horizons.

FINRA Department of Enforcement found that the Advisor Group Firms violated FINRA Rules 2330(d), 2330(e), 3110, 2010 and NASD Rule 3010 based on their foregoing supervisory failures.

Royal Alliance also consented to findings that it failed to appropriately supervise the rates that variable annuities were exchanged. Specifically, the AWC mentioned that from February 2014 to March 2016, Royal Alliance had not established and maintained a supervisory system and written supervisory procedures appropriately constructed to supervise exchanges of variable annuities. The AWC stated that only a limited number of representatives had been reviewed, and the determination of which representatives were reviewed did not depend on the rates in which annuity recommendations were made. Evidently, there were no surveillance procedures included within the firm’s supervisory procedures that had been constructed to identify alarming rates of exchanges. The AWC stated that Royal Alliance violated FINRA Rules 2330(d), 3110, 2010 and NASD Rule 2010 as a result of its failure to supervise in this regard.

The AWC stated that from January 2013 to December 2014, FSC generated more than $51,500,000.00 in variable annuity sales. $12,200,000.00 of those sales (more than 23% of total variable annuity transactions) consisted of L-share contract sales. FSC was fined $200,000.00 and censured.

SagePoint generated more than $52,700,000.00 in variable annuity sales from January 2013 to December 2014. L-share contracts comprised $11,500,000.00 of those sales (more than 21% of total variable annuity transactions). SagePoint consented to sanctions including a $200,000.00 fine and censure.

From February 2014 to December 2015, $61,900,000.00 in variable annuity sales had been generated by Royal Alliance. $15,600,000.00 in sales were due to sales of L-share contracts (more than 28% of total variable annuity transactions). Royal Alliance consented to sanctions including a $350,000.00 fine and censure.

Woodbury generated more than $107,100,000.00 in variable annuity sales between January 2013 and December 2014. L-share contract sales totaled $18,800,000.00 (19% of total variable annuity transactions). Woodbury consented to sanctions including a censure and $250,000.00 fine.

If you believe that you are a victim of an unsuitable annuity exchange executed by a representative of one of the Advisor Group Firms, call the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation concerning your legal rights and claims. Peter M. Spett has extensive experience recovering investor losses.

Morgan Stanley Allegedly Fails To Follow Investment Guidelines

Jack Ezra Kolker (CRD #: 1220600) is a prior Morgan Stanley general securities representative who disclosed a consumer-initiated, investment-related complaint from January 20, 2017. The complaint contained allegations that from December 2015 to December of 2016, investment guidelines and other instructions were not followed in reference to the Morgan Stanley customer’s stock and municipal debt investments. The customer’s damages have not been specified. Morgan Stanley denied the complaint on June 2, 2017.

There are at least two other customers of Kolker who have sought redress for misconduct. According to FINRA BrokerCheck, on April 2, 2008, a UBS Financial Services, Inc. customer filed a complaint alleging to have sustained losses by investing in auction rate securities. Apparently, the customer was one of many investors who suffered from the illiquidity of the auction rate securities market. On December 23, 2008, the customer agreed to settle the matter for $500,000.00, which reportedly represents the gross initial par value of the ARS position(s) held by the customer.

The other dispute consisted of a February 22, 2010 consumer-initiated arbitration proceeding brought on by several customers, one of which included a 91 year-old investor. The customers’ collectively alleged that the equity trading in their accounts was not suitable for them, and transactions had been executed without permission being provided by the customers. UBS settled the customers’ allegations of unsuitability and unauthorized trading for $125,000.00 in damages on September 1, 2010.

FINRA BrokerCheck indicates that Kolker was registered with UBS Financial Services Inc. until January 27, 2009. Between January 9, 2009 and November 2, 2017, he was registered with Morgan Stanley. On November 1, 2017, Kolker commenced employment with J.P. Morgan Securities LLC.

If you believe you are a victim of sales practice violations committed by Jack Ezra Kolker or another representative of Morgan Stanley, call the Law Office of Peter M. Spett at (561) 463-2799 for a free consultation concerning your legal rights and claims. Peter M. Spett has extensive experience recovering investor losses.

Morgan Stanley’s Lloyd Layton Fined For Unsuitable UIT Trading

Lloyd Thomas Layton (CRD #: 1618414) is a prior Morgan Stanley registered representative (2009 – 2015) who consented to Financial Industry Regulatory Authority (FINRA) fining him $5,000.00 and suspending him from having any association with a FINRA member firm in all capacities for three months according to Layton’s submission of Letter of Acceptance, Waiver and Consent #: 2017055691701, accepted by FINRA on August 13, 2018. FINRA held that Layton engaged in unsuitable trading in 54 Morgan Stanley customer accounts.

Specifically, the AWC stated that from July 2012 to December 2014, Layton engaged in the short-term trading of unit investment trusts (UITs). Those investments, as discussed in the AWC, are comprised of investment companies offering shares of a fixed securities portfolio in a public offering, and terminate on a maturity date specified in advance for investors. UITs, FINRA specified, generally contain hefty charges that are assessed to investors on an upfront basis, so the trading of UITs, especially on a short-term basis, is typically inappropriate.

From July 2012 to December 2014, Layton evidently made recommendations for customers to buy the UITS and subsequently sell the securities long before they matured. In fact, the findings revealed that most of the time, Layton recommended UITS containing 24-month maturities, and a customer would be assessed a sales charge of 1.95% up to 3.95% each time a UIT was purchased.

Despite the 24-month maturities, Layton supposedly made recommendations for customers to dispose of the UITs when those securities had only been held by customers for less than 12 months. The findings stated that customers held UITS for an average of 265 days before they were sold. Moreover, Layton evidently recommended in more than 60 occasions that customers take the proceeds from UIT sales and buy other UITS that were similar, if not identical, to those that customers sold before their maturities.

FINRA found that it was in no way suitable for customers to invest pursuant to Layton’s recommendations given the frequency and costs of the UIT transactions. Layton consented to FINRA’s findings of him violating NASD Rule 2310 and FINRA Rules 2111 and 2010 based on his unsuitable short-term UIT trading in Morgan Stanley customer accounts.

Morgan Stanley terminated Layton’s registration on March 26, 2015. He is currently employed with Wells Fargo Clearing Services, LLC in Washington, DC.

The Law Office of Peter M. Spett is experienced in representing investors in cases of unsuitable investment recommendations, fraud, negligence, and the failure of brokerage firms to supervise their financial advisors. If representatives such as Layton have traded in your account in an inappropriate manner, contact Peter M. Spett at (888) 217-4919 for a free consultation concerning the possible recovery of your investment losses.

UBS Sued For Unsuitable Investment Recommendations

David Richard Watkins (CRD #: 1043375) is a UBS Financial Services Inc. financial advisor (2004 – present) who disclosed a consumer-initiated, investment-related complaint from August 14, 2017 containing allegations that Watkins made unsuitable investment recommendations. The customer specifically alleged to have been poorly advised between May 2013 and October 2016 about the purchasing and holding of investments including exchange-traded funds (ETFs), equities and fixed-income municipal bonds. The customer is seeking $5,000,000.00 in damages.

There are at least two other UBS customers who have alleged Watkins to have committed sales practice violations. According to FINRA BrokerCheck, on September 24, 2015, a UBS customer filed a complaint alleging that from January 3, 2011 to August 12, 2015, the customer’s assets were allocated in bonds that were not appropriate for the customer. The customer alleged Watkins failed to follow the customer’s investment instructions of buying municipal bonds with a credit rating of AA or higher. Watkins was accused by the customer of knowing the bonds were classified as subordinated debt. Watkins’ investment recommendation, the customer contended, was driven by the fact that UBS had underwritten the bonds. UBS and the customer settled the complaint for $60,000.00 in damages.

On June 15, 2018, another customer of UBS filed a complaint alleging he was not provided important information about the reduction of a coupon rate on a municipal-debt investment and corresponding increase in the price of the security. The customer contended that he never authorized a bond to be purchased at the lower coupon rate. UBS estimated that the customer’s alleged damages exceed $5,000.00.

If you believe you are a victim of sales practice violations such as those alleged to have been committed by David Richard Watkins, contact the Law Office of Peter M. Spett for a complimentary consultation to evaluate your legal rights and claims.
 

Investors Sue Janney Montgomery Scott For Unsuitability

Charles James Euler Jr. (CRD #: 202696) is a financial advisor who disclosed a consumer-initiated, investment-related complaint from June 4, 2018 containing allegations against Euler of recommending unsuitable over-the-counter equities to the investor while registered with Janney Montgomery Scott LLC (Radnor, Pennsylvania), resulting in the investor’s account having been over-concentrated in speculative securities and causing losses. The complaint was settled for $45,000.00.

According to FINRA BrokerCheck, this is the seventh disclosure making reference to allegations of Euler’s sales practice violations affecting Janney Montgomery Scott LLC investors. The first disclosure, dated September 28, 2004, was a complaint involving allegations of misrepresentation of unit investment trust investments, where the investor alleged $50,000.00 in damages.

The second disclosure, which was dated March 7, 2016, involved an arbitration containing allegations that unsuitable stocks were held in the accounts of multiple investors. (Case#: 16-00248). The arbitration was settled for damages totaling $75,000.00. A third disclosure concerned an arbitration dated April 19, 2016 in which Euler was alleged to have allocated the investors’ accounts in stocks that were not suitable for them. (Case #: 16-01026). The investor agreed to settle the matter for $40,000.00 in damages.

In the fourth disclosure, a May 9, 2016 arbitration, the investor contended that Euler misrepresented and omitted facts pertaining to securities purchases, and further alleged that Euler executed trades for the investor’s account which neither reflected the investor’s investment objectives nor was authorized by the investor. (Case #: 16-01980). That arbitration was settled for damages totaling $250,000.00. The fifth disclosure also concerned a May 9, 2016 arbitration containing identical allocations of Euler’s sales practice violations. (Case #: 16-02087). The investor agreed to resolve the dispute for $350,000.00 in damages.

The sixth disclosure consisted of an arbitration dated January 26, 2017 involving allegations of unsuitable, speculative equities being held in the investor's account, resulting in an unbalanced investment portfolio. (Case #: 17-00209). A settlement was reached for the investor to be paid $150,000.00 in damages.

On April 30, 2018, following the sixth consumer-initiated investment-related dispute, Janney Montgomery Scott LLC terminated Euler’s registration.

If you believe that you are a victim of sales practice violations such as those alleged to have been committed by Charles James Euler, Jr., contact the Law Office of Peter M. Spett at (561) 463-2799 for a complimentary consultation to evaluate your legal rights and claims. Peter M. Spett has extensive experience recovering losses for investors.

Customer Lodges Dispute Against Dakota Securities For Investment Losses

Thomas Patrick Beattie (CRD#: 1321866) is a general securities representative who disclosed a pending consumer-initiated, investment-related complaint from April 16, 2018 containing allegations against Beattie of committing sales practice violations while registered with CP Capital Securities (Miami, Florida) and Dakota Securities International, Inc. (Miami, Florida), which caused the customer to experience losses on mutual funds, over-the-counter equities and other investments. The customer has alleged $250,000.00 in damages.

According to FINRA BrokerCheck, this is the fourth consumer-initiated, investment-related dispute in which Beattie’s sales practices have been called into question. The first complaint, dated May 12, 2011, involved allegations of nine unauthorized equity trades having been executed in a customer’s account when Beattie was registered with Great American Advisors, Inc. (Homestead, Florida). The customer alleged damages of $19,038.00.

A second complaint, dated February 11, 2013, alleged that Beattie misrepresented the customer’s information, and recommended unsuitable penny stock and corporate debt investments for the customer’s account while registered with Lincoln Investment (Homestead, Florida). That customer’s complaint was settled for $5,609.82. The third complaint, which is currently pending, concerned Beattie’s activities when registered with CP Capital Securities (Miami, Florida) and Dakota Securities International, Inc., where the customer alleged poor investment performance and excessive trading in the customer’s account between March 1, 2016 and January 1, 2018.  The customer alleged $251,000.00 in damages.

Beattie has additionally disclosed three regulatory actions regarding allegations of his misconduct. In particular, the Florida Department of Banking and Finance, Division of Securities and Investor Protection, authorized Beattie’s application for registration in the state subject to a Heightened Supervision Agreement containing restrictions on him from serving in a principal capacity in the securities industry or exercising discretion in customer accounts. (Case#: 88.206.DOS). The sanctions were based upon allegations that Beattie effected unauthorized trades in customer accounts and accrued customer complaints.

Subsequently, to resolve allegations of Beattie’s excessive and unsuitable trading in customer accounts, Beattie entered into a Stipulation and Consent Agreement with the Florida Division of Securities and Investor Protection, where he was ordered to pay a $5,000.00 fine and his registration was suspended. (Case#: 2824-S-6/99).

Beattie is no longer registered with Dakota Securities International, Inc. He has been registered with SW Financial (Melville, New York) since July 31, 2018.

If you believe you are a victim of sales practice violations such as those alleged to have been committed by Thomas Patrick Beattie, contact the Law Office of Peter M. Spett for a complimentary consultation to evaluate your legal rights and claims.

Fifth Third Securities Unsuitable Variable Annuity Exchanges

The Law Office of Peter M. Spett is investigating customer complaints against Fifth Third Securities for unsuitable variable annuity exchanges.  The Financial Industry Regulatory Authority recently sanctioned Fifth Third Securities $6 Million for cost and fee disclosure failures and unsuitable recommendations related to variable annuity exchanges.  Variable annuities are complex investments commonly marketed and sold to retirees or people saving for retirement.  FINRA found that Fifth Third failed to ensure that its agents and financial advisors obtained and assessed accurate information concerning annuity exchanges and misstated or omitted material facts regarding the costs and benefits of such exchanges.  If you believe you may have been the victim of a fraudulent variable annuity exchange, please contact the Law Office of Peter Spett at (561) 463-2799.