Articles Posted in This Week At Malecki Law

Malecki Law was featured in the news for filing a FINRA arbitration claim on behalf of investors alleging that Securities America failed to perform proper supervisory duties as their formerly registered broker, Hector May allegedly operated a Ponzi Scheme. In the Financial Planning article, investor fraud attorney Jenice Malecki provides additional information and commentary on her representation of nine clients against Securities America. Financial Planning provides breaking and daily news coverage as well as analysis to help independent financial advisors better their business, practice and client services. Readership often includes independent broker-dealers, financial planners and other industry professionals seeking insights into the highly regulated securities industry. Malecki Law spoke with Financial Planning to spread the message so that other innocent victims who lost their hard-earned savings may seek justice.

Investor fraud attorney, Jenice Malecki released more details regarding the specific allegations relating to Hector May’s allegedly fraudulent practices against investing clients to Financial Planning in hopes of raising awareness. Allegedly, victims of the New City broker’s Ponzi scheme were under the impression that Hector May invested their money into “tax-free” bond products from firms like General Electric. The clients later learned alleged Ponzi Schemer’s “tax-free” bond products were non-existent and apparently just words on false account statements.  When asked for a comment, Hector May’s attorney declined to provide a comment regarding a case started by a law firm placing ads in the newspaper for clients.

The clients are filing the claim only against Securities America since Hector May already had assets frozen and could not pay the award, Jenice Malecki commented.  FINRA rules place broker-dealers at fault for investment losses resulting from their failure to properly supervise and detect a Ponzi Scheme committed by their registered representative. Securities America had an obligation to monitor Hector May’s activities, including the fraud that transpired. Clients are claiming that Securities America missed many “red flags” that would have clued off a Ponzi Scheme.

Malecki Law filed an expedited FINRA arbitration complaint today on behalf of nine investors from Upstate New York, Northern Virginia and Long Island, New York alleging that Securities America, Inc. failed to supervise its registered representative Hector May and failed to audit his remote Securities America office, which it is alleged in essence allowed his alleged Ponzi-type fraud to persist for many years. Through these alleged supervisory shortcomings, it is alleged that Securities America’s Inc. aided and abetted fraudulent practices conducted by its registered representative as well as in his disclosed, approved SEC-registered investment advisor, Executive Compensation Planners, Inc. “At some point, a license to sell securities can become a license to steal when there is inadequate supervision of these remote brokerage firm offices,” offered well-known securities attorney Jenice Malecki.

Executive Compensation Planners was supposed to solicit wrap fee programs through Securities America, according to its Form ADV filed with the SEC.  Instead, as alleged in the FINRA pleading, Hector May had wires sent and checks written directly to Executive Compensation Planners; created fictitious statements; and pocketed client funds. Hector May reported managing $18 million in his Form ADV. Mr. May’s FINRA BrokerCheck report indicates that Hector May, who had been with Securities America since 1998, was terminated for misappropriation of clients’ assets just after the Department of Justice initiated a criminal investigation into his suspected felony, along with investigations by the U.S. Postal Inspectors and the United States Securities and Exchange Commission.

Prior to his alleged conduct coming to light, Hector May was widely known with an excellent reputation within his New York Community, often sponsoring charities – “clients now want to know if he was using their money to be charitable,” said Jenice L. Malecki, Esq., a securities lawyer in New York.  Mr. May’s wife, daughter and other family members are alleged to have worked with him.

Can’t imagine having a retirement brokerage account drained in a case of preventable identity theft? Such an unimaginable misfortune is a devastating reality for an investor alleging in a FINRA arbitration complaint that he had the entirety of his account at Invesco stolen, without any help or recompense from the brokerage firm.  An unidentified perpetrator used this unsuspecting investor’s private identifying information to access and steal money from a 401k retirement account. Malecki Law securities fraud attorneys recently filed a claim against Invesco Distributors Inc, on behalf of this investor alleging their failure to safeguard their client’s assets pursuant to FINRA Rules, SEC Regulations, and securities laws.

This foreseeable fraud initiated when, just around the busy Christmas holiday season, an unidentified individual accessed our client’s Invesco retirement 401k. The perpetrator changed the email address and phone number, which had previously been on file for ten years. Within days, the perpetrator stole funds totaling over $100,000 from the investor’s Invesco 401k brokerage account. The perpetrator also successfully took a loan against the 401k account and transferred money to a bank account not owned by our client. Furthermore, Invesco transferred $25,000 to the IRS as a penalty for borrowing against the 401(k) accounts. Amazingly, the investor learned of these unauthorized account transactions only from checking Invesco’s account portal.

Invesco Distributors, Inc. is an indirect wholly owned subsidiary of Invesco Ltd, according to their official website. Invesco Ltd. announced in a recent press release that their firm manages an estimated $972.8 billion in client assets. Based in Texas, Invesco Distributors Inc., is their U.S distributor of mutual funds, exchange-traded funds, institutional money market funds and other retail products. As a FINRA registered broker-dealer, Invesco Distributors Inc. is expected to comply with required industry practices, statutes, rules, and regulations. FINRA rules, SEC regulations and securities laws exist to encourage brokerage firms to protect their investor’s information.

Malecki Law is currently investigating allegations against Securities America, Inc. and its terminated financial adviser, Hector Anthony May.  Mr. May was employed almost twenty years with Securities America at its New City, New York office, and was terminated in March of 2018 in relation to an ongoing criminal investigation by the U.S. Department of Justice.  The investigation relates to an alleged Ponzi scheme and/or misappropriation of funds involving many investors and potentially many millions of dollars in losses.  If you have suffered investment losses with Securities America and/or had your retirement savings invested with Hector May through his own financial planning firm, Executive Compensation Planners, Malecki Law is interested in hearing from you.

In a Ponzi scheme involving Robert Van Zandt, Malecki Law successfully recovered over $7.4 million in investment losses through the firm’s representation of 120 victims from the Bronx, New York, who fell victim to Mr. Van Zandt’s $35 million Ponzi scheme.  Malecki Law’s successful representation was featured in the media, including CBS New York’s Eye Witness News.  Malecki Law has experienced attorneys who specialize in recovering investment losses for victims of financial fraud.

Yesterday, a Financial Industry Regulatory Authority (FINRA) arbitration panel in Boca Raton, Florida awarded Malecki Law attorneys $397,823.00 for principal investment losses against Morgan Stanley & Co., LLC.  Malecki Law brought the case on behalf of an elderly and retired couple with conservative investment objectives on claims that Morgan Stanley failed to supervise their accounts and unsuitably over-concentrated their portfolio in risky oil and gas master limited partnerships (MLPs).  In addition to the compensatory damages, the panel also ordered Morgan Stanley to pay the claimants in this case 9% in interest, $15,000.00 in costs, attorneys’ fees, $11,812.50 in forum fees, and a $20,000.00 penalty for the firm’s late production of relevant documents at and just prior to hearing.

Malecki Law regularly brings claims on behalf of investors against unscrupulous conduct by brokers and brokerage firms, and holds them accountable for mismanaging investor retirement accounts.  Elderly investors such as these find themselves especially at risk from poor investment recommendations made by brokers and securities firms because senior citizens are typically out of the workforce and have much less time and ability to recoup their losses than younger investors.  This is pertinent to yesterday’s win because, in setting the damages figure, the arbitration panel rightfully did not deduct investment income (i.e., dividends), which the claimants earned while they had their accounts open with Morgan Stanley.

This is also a notable win for Malecki Law because the case involved the purchase of MLPs, which is a “hot investment” on Wall Street these days.  MLPs offer high yields, but are generally recognized as risky and volatile investments, typically within the oil and energy sector, and are not suitable for most retirement accounts or conservative investors looking to preserve their capital.  In May of last year, the Securities and Exchange Commission (SEC) issued an investor alert on MLPs to warn investors of the significant risks in these products, including unexpected tax consequences, fluctuations in distributions, and concentration exposure in the energy sector with acute sensitivity to shifts in the prices of oil and gas.

Alliance for Investor Education and the PIABA Foundation is Hosting an Educational Conference about Securing Investors’ Financial Futures


National Town Hall
The National Investor Town Hall Meeting is a day-long series of presentations, free to the public, aimed at educating investors about the risks and rewards of financial investing. It will be held on October 29, 2016 at the Rancho Bernado Inn in San Diego, California. Many respected industry professionals, including Ms. Malecki and federal and state regulators will participate in four sessions to help attendees understand risk tolerance, choose financial advisors and avoid becoming victims of financial fraud.

“Financial fraud costs Americans approximately $50 billion each year. It has been my mission for over a decade to educate and empower investors, lending them a voice and holding big entities accountable for violating their fiduciary and ethical duties,” said Jenice Malecki, the founder of Malecki Law. She further adds, “I am excited to be part of this much needed grass-root investor education drive.”

PLIMs. Malecki was a panelist recently at the Practising Law Institute’s (PLI) Securities Arbitration 2016 all-day seminar, where she spoke about ethical and other issues in securities arbitration. Ms. Malecki has spoken at PLI consistently for many years. Her panel Practicum on Experts and Closings focused on expert witnesses and closing arguments. The panel and the seminar had other distinguished securities industry members from the FINRA Dispute Resolution office, professors of law, litigators, mediators and wealth managers. Ms. Malecki is invited every year to participate in PLI’s securities arbitration seminars.

 

Securities Experts Roundtable (SER) is hosting its 24th Annual Conference and Membership Meeting on July 22 and July 23 at a private and exclusive destination, The Union League Club. Ms. Malecki will participSecuritiesExpertsRoundtableate in two of their panels “The FINRA Resolution Taskforce Report After Seven Months: Where Are We Now and Where Are We Going” and “The Graying of America- Suitability and Supervision for Senior Investors”.

Ms. Malecki frequently meets with the Securities Exchange Commission (SEC), Department of Justice (DOJ) and Financial Industry Regulatory Authority (FINRA) to discuss issues related to investor protection, supervision for elderly investors, and suitability. She also speaks at educational events and conferences.

Other panelists and speakers at the SER comprise of luminaries in securities and investment litigation, law professors, members of FINRA, and FBI white-collar crime experts. The conference provides an in-depth view and presentation on securities litigation. SER has 90+ experienced experts in securities and investment consulting, wealth management, investment banking, litigation and arbitration, and more.

 

FINRA new

This month, Malecki Law attorneys were awarded full net out-of-pocket damages of $142,168.00 by a Financial Industry Regulatory Authority (FINRA) Arbitration Panel. There has been a series of media reports on this, initially appearing in the  InvestmentNews and followed by the Financial Times site Financial AdvisorIQ, and other websites. The claim was brought against Garden State Securities Inc. by Malecki Law on behalf of an elderly investor Anthony Romano on alleged charges of over-trading, over-concentration, and unsuitable investments.

This was another noteworthy investor case win for Malecki Law, who regularly brings claims against unscrupulous broker-dealers and holds them accountable for mismanaging investor’s accounts.

Elderly investors such as Mr. Romano find themselves specially at risk because once they lose their life’s savings to poor decisions made by brokers and securities firms, they do not have sufficient time to recoup their losses. The FINRA Arbitration panel also assessed that all forum fees in the amount of $14,400 will be paid by the respondent Garden State Securities, Inc.

The experienced Securities attorneys at Malecki Law managed to secure a major win on behalf of one of their international clients. They managed to secure a summary judgment dismissal for a Chinese businessman, a well-known inventor and public figure in China, who was being sued in excess of $30 million for being the controlling shareholder of a company that went out of business. The opposing counsel was Weil, Gotschal & Manges LLP.

Today, Ms. Jenice Malecki is the Chair at a FINRA mock arbitration for St. John’s students. She has actively mentored students over the years from different law schools through lectureships and speaking engagements.