Articles Tagged with AWC

Morgan Stanley broker Armando Fernandez has been suspended by the Financial Industry Regulatory Authority (FINRA) for 20 business days, according to publicly available FINRA records.  Per a Letter of Acceptance, Waiver and Consent filed with FINRA, Mr. Fernandez was accused of exercising discretion in a customer account without prior written acceptance of the account as discretionary from his member firm.  FINRA records indicate that Mr. Fernandez was also fined $7,500.

Generally, brokers are prohibited from placing trades in a customer account without speaking to the customer first, unless an account is a discretionary account.  When discretion is given by the customer to the broker, it is typically documented in a signed agreement.  When there is not such a signed agreement, and a broker executes transactions on a discretionary basis anyway, violations of FINRA Rules likely have taken place.

Customers who have been the victim of brokers improperly exercising discretion in their accounts (or violating other FINRA Rules) may be entitled to recover their losses in an action against the firm and/or broker responsible.

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Timothy L. Pilkington.  Mr. Pilkington was employed and registered with Stephens, a broker-dealer with an office in Memphis Tennessee from January 2012 through March 2015, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA).  He was also previously registered with Morgan Stanley Smith Barney, according to industry records.

According to his BrokerCheck, Mr. Pilkington was the subject of one customer complaint in 2009.  More recently, a Letter of Acceptance, Waiver and Consent (AWC) was accepted by FINRA stating that Mr. Pilkington was barred from associating with any broker-dealer for failing to respond to the FINRA 8210 request for information.  8210 Requests require that people registered to recommend and sell securities must provide documents, testimony and information regarding matters under investigation.  According to the AWC, Mr. Pilkington failed to disclose two FDIC orders to FINRA.  One of those orders disclosed that Mr. Pilkington agreed to pay $2,500, where “the FDIC considered the matter and determined it had reason to believe that the [he] has engaged or participated in violations of law, unsafe or unsound banking practices and/or breaches of fiduciary duty.”  In another FDIC order, Mr. Pilkington was “prohibited from participating in the conduct of affairs of, or exercising voting rights in, any insured institution without the prior written approval of the FDIC.”

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

One of the well-known and strictly enforced rules in the securities industry is that brokers should not enter into undisclosed private loan transactions with their clients.  A Letter of Acceptance, Waiver and Consent (AWC) was recently accepted by the Financial Industry Regulatory Authority’s (FINRA’s) Department of Enforcement from Paul F. Gans, Jr., who was employed as a registered broker by Raymond James Financial, Inc. up until November 2014.  According the AWC, Mr. Gans inappropriately loaned money to a “family friend” in exchange for a three-year promissory note bearing 8% annual interest, without disclosing the transaction to his employer and ensuring it complied with his employer’s policies and procedures.  Mr. Gans was accused by FINRA of violating FINRA Rule 3240 (Borrowing from or Lending to Customers) and Rule 2010 (Standards of Commercial Honor and Principles of Trade).

Rule 3240 prohibits brokers from borrowing from or lending to customers, unless the transaction is permitted by the employing firm after disclosure and in compliance with the firm’s policies and procedures.  According to the AWC, Mr. Gans did not disclose the promissory note transaction to his employer.

As detailed in the AWC, Mr. Gans was suspended from association with any FINRA member for ten business days, and fined $5,000.  The firm, Raymond James Financial, Inc., disclosed on FINRA BrokerCheck that Mr. Gans was discharged for his lack of disclosure of an outside business activity, which may or may not refer to the promissory note transaction.  It was also disclosed on FINRA BrokerCheck that Mr. Gans was also discharged from his prior employer Morgan Stanley Dean Witter in 2000 for also violating that firm’s policies and procedures, that time for mailing correspondence without prior approval.  FINRA BrokerCheck also revealed that Mr. Gans was the subject of one customer complaint in 1994 for allegedly failing to inform a client in the decline in value of a “mutual investment,” which claim was settled by Morgan Stanley Dean Witter.

According to a recent Acceptance, Waiver & Consent (“AWC”) submitted by broker Brian Berger with the Financial Industry Regulatory Authority (FINRA), Mr. Berger has been banned from associating with a broker-dealer in the securities industry.  According to the AWC, in June 2015 FINRA “initiated an investigation into allegations that Mr. Berger had misappropriated funds from elderly customers with registered with Wells Fargo Advisors LLC and MetLife Securities, Inc.”  Mr. Berger was reported to be licensed by Wells Fargo Advisors, LLC from July 2010 through July 2014, and with MetLife Securities, Inc. from July 2014 to April 2015.  It is further reported that he was briefly licensed by a different broker-dealer named Newbridge Securities Corporation from April to June 2015.

As stated in the AWC, Mr. Berger did not to voluntarily participate in FINRA’s investigation, and as a result was barred from the securities industry.

Mr. Berger’s publicly available CRD Report describes several customer complaints that he has faced since 2011.  The CRD Report shows that a customer alleged that there were unauthorized payments made against the customer’s account for discover card accounts owned by the financial advisor.  Though reported that the customer alleged damages of approximately $175,000, the allegations were reported as settled for approximately $186,000.

A Letter of Acceptance, Waiver and Consent (AWC) was recently accepted by Financial Industry Regulatory Authority’s (FINRA’s) Department of Enforcement from Adrian S. Lauer.  Mr. Lauer was accused of failing to disclose outside business activities on his Form U4 and to his employer.  Specifically, Mr. Lauer was accused of violating FINRA Rules 2010 (Standards of Commercial Honor and Principles of Trade) and 3270 (Outside Business Activities of Registered Persons).

It was alleged that from April 2011 through March 2014, Mr. Lauer participated in a 401(k) advisory business and worked as a webmaster for a college alumni club while employed at Securities America, Inc.  The AWC detailed that Mr. Lauer failed to disclose his participation in the advisory business, but later sought approval from the firm.  It was alleged that although the firm denied the request regarding the advisory business, Mr. Lauer also continued to participate in this business.  The AWC further detailed that while Mr. Lauer sought approval of his college alumni club activities after he had already begun participating, the firm informed him of the steps he needed to take for the firm to grant his request but he never followed the steps, still choosing to participate in the outside business activity.

The AWC detailed that as a result of his violations, Mr. Lauer consented to a 60-day suspension and a $5,000 fine.