Articles Tagged with broker malpractice

The securities fraud attorneys are interested in hearing from investors with complaints involving John Smallwood of Commonwealth Financial Network.  Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Smallwood is a registered stock broker with Commonwealth, based out of Red Bank, NJ.

Mr. Smallwood’s BrokerCheck Report indicates that he has been the subject of at least two customer complaints in the past three-plus years.  Per FINRA, the complaints against Mr. Smallwood have alleged unsuitable investment recommendations and breach of fiduciary duty, among other things.

FINRA records indicate that Mr. Smallwood’s customers have recovered $90,000 and $97,500 respectively in connection with their complaints.

The securities fraud attorneys at Malecki Law are interested in hearing from investors with complaints involving Adam F. Coblin. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Coblin is currently not a registered stock broker or investment advisor. He was previously registered with the Gilford Securities Incorporated in New York.

Mr. Coblin’s BrokerCheck Report indicates that he has been the subject of at least ten customer complaints.  At the center of several of these complaints was unsuitable investments leading to huge financial losses, negligence in handling customer accounts, unauthorized sales. In 2013, Adam Coblin resigned from Gilford Securities while he was being reviewed for customer complaints involving unsuitable investments, activity and negligence.

According to BrokerCheck, there are numerous customer disputes in the past, dating from 2012 to 1995, involving Mr. Coblin which have been settled by awarding damages of $910,000, $3,000, $107,500 and $32,000. He has also been registered with the GMS Group LLC, Spencer Clarke LLC, Broadband Capital Management LLC, Dalton Kent Securities Group, Bluestone Capital Partners, Gruntal & Co., Prudential Securities Inc., Oppenheimer & Co., Merill Lynch, Pierce, Fenner & Smith Co., Bear Stearns & Co.

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 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.

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.

Per Financial Industry Regulatory Authority’s (FINRA) announcement this week, a former registered representative of Caldwell International Securities Corp., Richard Adams aka Rasheed Aree Adams, has been barred permanently from the securities industry for churning customer accounts, other securities violations, and failure to report many unsatisfied judgments and liens on his U4 Registration Form as stipulated in FINRA rules. In addition to Caldwell, he was also previously registered with PHD Capital and E1 Asset Management Inc. from 2002 to 2011.

FINRA’s investigation revealed that Adams excessively traded the accounts of two customers, between July 2013 and June 2014, resulting in profits and commissions in the excess of $57,000 for himself while resulting in losses amounting to over $37,000 for customers. The findings stated that as a result Adams willfully violated section 10(B) of the Securities Exchange Act of 1934 and rule 10B-5, willfully failed to amend Form U4, and failed to provide documents requested by FINRA. Adams neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

Richard Adams is no stranger to regulatory and legal proceedings and has a reported history of customer disputes and violations. According to the CRD 13 judgement/liens, 5 customer disputes, 2 investigations and 1 regulatory disclosures have been reported against him. In 2001 there were allegations of unsuitability, unauthorized trading, and churning made against him while he was employed at The Golden Lender Financial Group, Inc, and this customer dispute was finally settled for $10,000. Currently, there is a pending FINRA investigation against Adams for potential violation of FINRA rules 2010 and 2111, and willful violations of Article V, section 2 from 2014.

Beware of alternative investments.  A Letter of Acceptance, Waiver and Consent (AWC) was recently accepted by the Financial Industry Regulatory Authority’s (FINRA’s) Department of Enforcement from Robert Michael Diehl.  Mr. Diehl was accused of bypassing firm policy in order to sell equity indexed annuities (“EIAs”) while a registered representative of Park Avenue Securities LLC.  Specifically, Mr. Diehl was accused of violating FINRA Rules 2010 (Standards of Commercial Honor and Principles of Trade) and 3270 (Outside Business Activities of Registered Persons).

Equity indexed annuities are alternatives to fixed rate or variable rate annuities.  They are characterized by yielding interest returns at least partially based on equity indexes, such as the S&P 500, rather than mutual funds that are used in variable annuities.  They are generally considered complex investments that typically yield high commissions to the selling brokers and high penalties to investors for early termination.

According to the AWC, between September and October 2014, Mr. Diehl sold EIAs to two customers.  The AWC detailed that according to the firm’s compliance manual, Mr. Diehl was required to have the customers complete a non-brokerage account application for the EIAs sales, provide the customers with an Explanation of Investment form for EIAs, and submit these completed forms to his supervisor for review.

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.

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.

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