Articles Posted in Securities Fraud & Unsuitable Investments

The recent market correction has caused many people to worry about the performance of their securities accounts.  Senior-aged investors (and other conservative investors) are particularly at risk for losses in their accounts if they were inappropriately invested too heavily in equities and other alternative investments.

The Op-Ed published in the Wall Street Journal on August 24, 2015 notes that the low-yield bond environment has enticed some investors to “climb on the bandwagon of rising share prices.”  Brokers may be similarly tempted to recommend risky stocks to their conservative investors, and to recommend concentrated levels of stocks.  However, what may be suitable for a middle-aged investor may not be suitable for an senior-aged investor.

Suitability is an important investor-specific inquiry both the broker and broker-dealer must perform to ensure the investments that are recommended are appropriate given the age, relative wealth, experience and risk tolerance of each investor, among other factors.  A broker’s unsuitable recommendations could be especially problematic for those investors seeking stability and safety of principal, including senior-aged investors who rely on their securities portfolios to generate income.

The risks to these investors would include overconcentration in stock investments.  Overconcentration occurs when a portfolio is not appropriately diversified.  Generally, senior-aged investors and other conservative investors need portfolios that include an appropriately diversified mix of investments.  The risk to the investor of overconcentration in stocks is obvious: when the value of those stocks drop, the investor has instantaneous losses.  Because of this, it would be unsuitable in the low-yield bond environment to recommend only equity investments for conservative and senior-aged investors.

Investors have the right to seek to hold their stockbroker accountable for the losses in their securities account caused by inappropriate overconcentration and unsuitable recommendations.  Generally, the investor would bring an arbitration case with the Financial Industry Regulatory Authority (FINRA).

The attorneys at Malecki Law have successfully represented many senior-aged and other conservative investors in arbitrations against broker-dealers to recover losses sustained as a result of unsuitable and overconcentrated positions that were inappropriately recommended to them.  If you believe you have suffered losses in your securities account, as a result of questionable securities recommended to you, or questionable actions taken in your securities account, please contact us for a free confidential consultation.

The securities fraud attorneys at Malecki Law are interested in investigated possible claims on behalf of investors who have complaints regarding former stockbroker Manuel Dopazo.  According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Dopazo has been the subject of multiple customer disputes in just the past ten years.

Per FINRA, in 2015 a customer complaint involving Mr. Dopazo alleged misrepresentations, omissions, failure to supervise, and the recommendation of unsuitable investments seeking $640,000 in damages.

In 2009, Mr. Dopazo was involved with another customer dispute alleging a $30,000 loss, per BrokerCheck.  Another customer complaint, in 2008, alleged more than $50,000 in losses stemming from suitability violations.

Over his 21 years in the financial industry, Mr. Dopazo was registered with multiple firms including Keystone Capital, Cantella & Co., Raymond James Financial, Dreyfus Service Corp., Natwest Investor Services, Landmark Brokerage Services, MML Investors Services, and Massachussetts Mutual Life Insurance Co.

If you or a family member lost money invested with Manual Dopazo, you are encouraged to contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law has successfully brought securities actions on behalf of investors who suffered losses as a result of unscrupulous actions taken in their securities accounts, recovering millions of dollars for their clients.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

people-4-1163712The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Michael Fasciglione.  Mr. Fasciglione is believed to be registered with National Securities Corporation, based out of Mineola, NY.  He has also recently been registered with Oppenheimer & Co. and First Montauk Securities, according to industry records.

According to BrokerCheck, as maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Fasciglione has been the subject of more than 10 customer complaints.  Stretching back as far as 1995, Mr. Fasciglione has been accused of recommending unsuitable investments to customers, breach of fiduciary duty, churning, excessive trading, fraud, unauthorized trading, taking excessive risk, misrepresentations, allowing a customer’s account to exceed comfortable margin balances, and charging excessive commissions, per FINRA records.

Of these customer disputes, FINRA records indicate that some customers received back tens of thousands of dollars in connection with their complaints.  One customer reportedly received back $300,000 in connection with an unauthorized trading complaint, while another reportedly received $120,000 in a suitability claim.

Mr. Fasciglione’s BrokerCheck also indicates that he has been the subject of two regulatory investigations.  In 2004, the New York Stock Exchange reportedly suspended Mr. Fasciglione for two months.  Just this past year, Mr. Fasciglione was reportedly suspended for one month and fined $5,000 for failing to timely amend his form U4, a FINRA licensing and disclosure document.

If you or a family member lost money invested with Michael Fasciglione, you are encouraged to contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law has successfully brought securities actions on behalf of investors who suffered losses as a result of unscrupulous actions taken in their securities accounts, recovering millions of dollars for their clients.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

 

The Securities and Exchange Commission (SEC) announced this week that two Citigroup Affiliates, Citigroup GlobaCitigroup (1)l Markets Inc. (CGMI) and Citigroup Alternative Investments LLC (CAI), agreed to pay $180 million to settle charges of defrauding investors with false and misleading claims. According to allegations, these Citigroup affiliates had claimed that their hedge funds, Falcon fund and ASTA/MAT,  were low-risk products safe for traditional bond investors, however, these funds collapsed during the financial crisis.

According to SEC’s investigations, the above mentioned Citigroup affiliates raised almost $3 billion from 4,000 investors by making false and misleading representations for their hedge funds. They are reported as having continued to claim that these funds were low-risk and made false assurances about liquidity even as the funds started collapsing. The investigation also revealed that CAI raised $110 million in additional investments even when the fund was in dire situation and Citigroup employees presented the funds to investors in a manner that was at odds with the fine print in the written and marketing materials provided to investors. The Citigroup affiliates consented to settle without admitting or denying the findings that they willfully violated Sections 17(a)(2) and (3) of the Securities Act of 1933, GCMI willfully violated Section 206(2) of the Investment Advisers Act of 1940, and CAI willfully violated Section 206(4) of the Advisers Act and Rules 206(4)-7 and 206(4)-8. The firms have also consented to censure and will cease and desist from future violations.

Malecki Law takes a proactive and informed approach to national and international financial news of today. This represents a classic case of Securities Fraud where investors are misled into investing in unsuitable products. SEC holds investment firms and brokers accountable for looking out for investors’ best interests and the team at Malecki Law represents and guides investors who have been victimized by false claims, false assurances and misrepresentations. For a comprehensive list of kinds of Securities Fraud please click here and contact us if you feel you have suffered similar losses.

businessman-silhouette-1237565 The securities fraud attorneys are interested in hearing from investors with complaints involving Dwarka Persaud.  Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Persaud is a registered stock broker with Buckman, Buckman & Reid, based out of Shrewsbury, NJ.

Mr. Persaud’s BrokerCheck Report indicates that he has been the subject of at least six customer complaints.  At the center of several of these complaints was churning and excessive commissions.  Churning is the frequent,over-trading of a customer’s account by the broker to generate high commissions paid by the customer, benefitting the broker and the firm.  Churning is against the law and industry regulations.

Mr. Persaud is reportedly the subject of at least two currently pending customer complaints, each alleging and “unauthorized trading.”  One of these complaints also alleges churning.  The other alleges that the unauthorized trading caused more than $45,000 in losses.

Just last year, Mr. Persaud was reportedly the subject of another customer dispute alleging “churning,” “breach of fiduciary duty” and “unsuitable investments.”  The case, alleging $100,000 in damages, was reportedly settled for $25,000.

In 2011, Mr. Persaud was again the subject of a “churning, excessive commissions” complaint that settled for $55,000, per FINRA.  Mr. Persaud was the subject of a 2000 customer complaint, in which the customer was reportedly granted $40,000 in damages.

In addition to Buckman, Buckman & Reid, Mr. Persaud has also reportedly been registered with Garden State Securities, Andrew Garrett, Inc., The Concord Equity Group, Gunnallen Financial and Aura Financial Services.

If you or a family member lost money invested with Dwarka Persaud, you are encouraged to contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law has successfully brought securities actions on behalf of investors who suffered losses as a result of unscrupulous actions taken in their securities accounts, recovering millions of dollars for their clients.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

Malecki Law is investigating potential claims by investors relating to Dennis C. Lee, a former AXA Advisors, LLC broker who was recently terminated by the firm in April 2015.  According to Mr. Lee’s publicly available Financial Industry Regulatory Authority (FINRA) BrokerCheck report, he was “discharged for failing to disclose financial issues requiring Form U4 amendments, mismarking trade tickets, and placing securities trades away from AXA.”  If substantiated, each of these failings could be potentially serious violations of securities laws and rules.

According to Mr. Lee’s BrokerCheck report, he has had other legal issues, including one FINRA Arbitration proceeding that was filed by a customer in February 2015 alleging that he made unsuitable investment recommendations, transferred funds to a new account without the customer’s knowledge or consent, engaged in unauthorized trading and submitted policy documents containing a forged signature.  The BrokerCheck report also details two settlements between Mr. Lee and American Express and Ballys Park Place Casino Resort.

It is believed that other investors may have been misinformed about trading that may have taken place in their accounts that were managed by Mr. Lee.  It is further believed that Mr. Lee may have used his ethnicity and religious background to obtain clients.  The SEC has cautioned investors against affinity fraud, which refers to investment scams that prey on members of religious or ethnic communities, the elderly or other professional groups.  More information regarding affinity and other investment-related fraud can be found on the Malecki Law website.

Malecki Law has previously successfully represented investors in claims arising from affinity fraud and other sales practice violations.  If other investors who entrusted Mr. Lee with their trading, retirement or insurance accounts have questions regarding their account statements, they should contact to attorneys at Malecki Law for a free and confidential consultation.  Malecki Law lawyers would also like to speak with anyone who may have any further information regarding Mr. Lee.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

Malecki Law is investigating possible claims by investors, involving Bright Lake LP and Bright Lake Management, and possibly  Ilan Preis, Mikhail Filshtinskiy, and Carlos Mejia, against various entities including large broker dealers, such as Wells Fargo, Merrill Lynch, JP Morgan or others.

Apparently, some investors in Bright Lake LP recently received correspondence from Mr. Preis at Bright Lake Management which informed them of large scale losses sustained in their accounts over a relatively short time period.  It is believed that some investors were misled about the risk and other material information relating to the Bright Lake LP fund, as well as that it may have been sold in concert with registered persons at brokerage firms.

These Bright Lake investors may be left confused as to what if anything can be done to recover all or at least some of these losses.  The securities law attorneys at Malecki Law are presently investigating these possibilities for recovery.

So, any and all investors who believe they may have suffered losses in Bright Lake LP or through other investments with Mr. Preis, Mr. Mejia and Mr. Filshtinskiy are encouraged to contact our offices to explore their legal rights and options for recovery, including potential claims against Wells Fargo, Merrill Lynch, JP Morgan or others..

As part of their investigation, the lawyers at Malecki Law are eager to speak with investors or anyone else with information about Bright Lake LP, Bright Lake Management, Mr. Preis, Mr. Mejia or Mr. Filshtinskiy.

According to FINRA BrokerCheck, Mr. Preis was registered through FINRA to sell securities from 2005 thought 2012, but is not presently registered with any FINRA member firm.  Per his BrokerCheck report, Mr. Preis was discharged from Citigroup in October 2012 amid allegations of wrongdoing in a customer account.

It is believed that after being discharged from Citigroup, Mr. Preis started Bright Lake Management which operates the Bright Lake LP fund.  Mr. Filshtinskiy and Mr. Mejia may have known Mr. Preis and may have worked with him.

According to FINRA’s BrokerCheck, Mr. Filshtinskiy and Mr. Mejia were both recently registered with Wells Fargo Advisors, a FINRA registered broker dealer.  Mr. Filshtinskiy was reportedly discharged in April 2014 following allegations of a “loss of management confidence involving certain activities undertaken for the purpose of meeting enhanced compensation goals.”

Mr. Mejia is reporting as having been registered with Wells Fargo Advisors from 2010 through April of 2015.  As of June 2015, Mr. Mejia has been reported as being registered with Purshe Kaplan Sterling Investments, per FINRA.

If you or a family member invested in Bright Lake LP, contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

According to a Letter of Acceptance Waiver and Consent filed with the Financial Industry Regulatory Authority (“FINRA”), Thomas Buck has been barred by FINRA from working with any FINRA member firms. Mr. Buck was a former top broker at Bank of America Merrill Lynch and was at the time a broker at RBC Wealth Management.

Mr. Buck was a registered broker at Merrill Lynch’s Carmel, Indiana office, which was part of the firm’s Indiana complex. While at Merrill Lynch, Mr. Buck, who reportedly oversaw $1.3 billion in assets, was accused of failing to discuss pricing alternatives with customers, among other allegations.  In addition, Mr. Buck was accused of unauthorized trading and using discretion in customer accounts improperly and in violation of FINRA Rules.

Buck was reportedly fired from Merrill Lynch in March.  Just four months after, he was reported as being barred from working at any FINRA-associated broker-dealer.  According to FINRA, Mr. Buck used commission-based accounts even though fee-based accounts would have been less expensive for clients. In some cases, clients were allegedly charged significantly more in commissions by virtue of the fact that they were not placed in fee-based accounts.

The extent of Mr. Buck’s use of commission-based accounts, if true, is shocking.  Nearly 80% of the revenues generated by Buck were from commission-based activity, according to the AWC.  Whereas, 70% of the revenue generated at the Indiana complex that housed Buck’s group was said to be from fee-based accounts.  Not only did he allegedly mislead clients about the two account options, but he also is said to have actively engaged in unauthorized trading.

Mr. Buck, who had 33 years of experience in the securities industry, has 12 customer disputes according to his FINRA BrokerCheck report. These disputes were all filed in 2015 and seem to stem from his actions at Merrill Lynch.

Malecki Law has previously represented many investors successfully in FINRA arbitration proceedings involving  firms’ failures to supervise their registered representatives and financial advisors.  If you believe you have suffered losses as a result of questionable actions taken in your securities account, please contact us immediately for a confidential consultation.

The Wall Street Journal reported on July 2, 2015 that many investors may suffer losses as a result of the attempts by Puerto Rico Electric Power Authority (PREPA) to restructure its debt with its creditors in order to avoid a default and other Puerto Rico economic woes.

While clearly many investors are and will continue to be harmed in this market, the pain is likely to be harder felt by two sets of victims of UBS’s closed-end bond funds that are tied to debt issued by PREPA, other utilities and Puerto Rico’s general obligation bonds.

We recently wrote regarding how the brokers who recommend products such as UBS’s closed-end funds may have also been given faulty information from the firm.  Then, Reuters ran an article describing a taped meeting at UBS where leadership threatened the UBS Puerto Rico brokers to sell the closed-end funds at all costs despite growing concerns about the products.  In one of the first arbitration awards to be announced in which UBS was ordered to pay $1 million to an investor related to the UBS closed-end bond funds, a Financial Industry Regulatory Authority (FINRA) arbitrator stated that a recommendation of the bond fund was unsuitable because it was “grossly overconcentrated… any proper UBS branch office or other review should have detected such obvious unsuitability.”

Alleging supervision and other firm failures, Malecki filed a case on behalf of two former UBS Puerto Rico brokers, Jorge Bravo and Teresa Bravo, and anticipates filing other cases on behalf of additional brokers.  The Bravos alleged in their Statement of Claim against UBS that they were both misled and induced by the firm into selling the closed-end bond funds to their clients and were harmed because Teresa Bravo purchased $100,000 of the bond funds herself.

We have been informed that additional brokers may be terminated in the future as a result of the continued fallout over the UBS closed-end bond funds.  These brokers should contact an attorney to discuss their legal options upon their termination, because UBS may be liable for damages to them, as a result of the well-publicized catastrophe that has resulted from the products the brokers were misled and induced to sell, and their clients bough, both upon false pretenses.

It was recently reported that Keith M. Rogers, formerly employed by GLS & Associates, Inc., a FINRA broker-dealer, has been indicted and held on $2 million bond on securities fraud charges, where it was reported that he took investors’ money to pay for personal expenses and repay other investors, a classic Ponzi scheme scenario.  Previously, it was reported that Mr. Rogers was ordered by the Alabama Securities Commission to cease and desist from dealing in securities in the State of Alabama.  In September 2014, Mr. Rogers apparently consented to a bar from the securities industry was barred from the securities industry by the Financial Industry Regulatory Authority (FINRA) for failing to cooperate in FINRA’s investigation into Mr. Roger’s alleged diversion of customer funds away from GLS brokerage accounts.  According to the Administrative Order filed by the Alabama Securities Commission Mr. Rogers facilitated transactions in a company called R&P Development LLC from 2009 through 2013, when he was registered by GLS & Associates, Inc. and Warren Averett Asset Management.

FINRA specifies strict rules on a broker’s ability to solicit business to businesses that are not run by their employing broker-dealer.  Malecki Law attorneys have seen instances where employing broker-dealers fail to properly supervise a broker’s activities.  According to FINRA Rules, Broker-dealers like GLS & Associates Inc. have an important non-delegable duty to supervise the conduct of their financial advisors and employees.  The firm may be held liable for customer losses if the firm failed to properly supervise their employees.  If a broker violates FINRA Rules or securities laws, both the broker and the broker’s employing firm may be held liable for the customer’s losses.

Malecki Law has previously represented many investors successfully in FINRA arbitration proceedings involving outside business activities and firms’ failures to supervise their registered representatives and financial advisors.  If you believe you have suffered losses as a result of questionable actions taken in your securities account, please contact us immediately for a confidential consultation.