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.

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.