Articles Tagged with broker violation

As reported recently, the Financial Industry Regulatory Authority has commenced an investigation into the cross-selling activities of several broker dealers in the wake of the Wells Fargo fallout. FINRA’s objective has reportedly been to determine just how much cross selling is taking place (including promotion of products such as credit cards and loans) and what incentives are being provided to employees to engage in the conduct.

A FINRA spokesperson was quoted as saying, ““In light of recent issues related to cross-selling, FINRA is focused on the nature and scope of broker-dealers’ cross-selling activities and whether they are adequately supervising these activities by their registered employees to protect investors.”

Supervision at broker dealers is a very critical aspect of customer service. It is important that brokers and their firms are only promoting and selling products to customers that are appropriate for that customer and in the customer’s best interest. As has been shown by the Wells Fargo disaster, cross-selling incentive programs can compromise that goal by creating a conflict of interest.

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Barry D. Abrams.  Mr. Abrams is currently employed and registered with Ameriprise Financial Services, Inc., and works at the broker-dealer’s Marlton, New Jersey office, according to his publicly available BrokerCheck records maintained by the Financial Industry Regulatory Authority (FINRA).

Per his BrokerCheck report, Mr. Abrams was previously employed and registered by Securities Service Network, Inc. from 2001 to 2013 and was discharged from that firm for “exercise[ing] discretion in a client account without written authorization from the client and without firm approval.”  Prior to his employment and dismissal from Securities Service Network, Inc., Mr. Abrams was employed and registered with Morgan Stanley from 1995 to 2001, according to BrokerCheck records.

In 2015, Mr. Abrams was fined and suspended from association with any FINRA member broker-dealer for 15 business days by FINRA, after submitting a Letter of Acceptance, Waiver and Consent No. 2013039371801 (AWC).  According to the AWC, Mr. Abrams violated NASD Conduct Rule 2510(b) (Discretionary Accounts) and FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade) by placing discretionary transactions in a customer’s account without first obtaining prior written authorization from the customer and acceptance by the firm for such discretionary trading.

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against former stockbroker Winston Wade Turner.  Mr. Turner had been employed and registered with Pruco Securities, LLC, a broker-dealer, from July 2013 to August 2015, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA).

Per his BrokerCheck report, Mr. Turner was previously employed by MetLife Securities Inc. from December 2011 to July 2013.  Mr. Turner was discharged on August 3, 2015 for making an unsuitable variable annuity recommendation, providing inaccurate information to the company regarding the transaction, and for making payments to a client dissatisfied with the performance of their annuity, according to BrokerCheck records.

Mr. Turner was subsequently barred from associating with any FINRA securities firm according to a Default Decision entered in the FINRA Office of Hearing Officers on July 8, 2016, in Disciplinary Proceeding No. 2013038398401.  According to the Decision Mr. Turner violated: (i) FINRA Rules 4511 and 2010 by providing false information and engaging in deceptive acts in connection with recommendations of variable annuities; (ii) Section 10(b) of the Exchange Act, Rule 10b-5 and FINRA Rules 2020 and 2010  by fraudulently misrepresenting and omitting material facts to his customers; and (iii) FINRA Rules 8210 and 2010 by failing to provide testimony and information in FINRA’s proceeding.

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Richard William Martin.  Mr. Martin was most recently employed and registered from July 2009 to July 2015 with G.F. Investment Services, LLC from an office in Penang, Malaysia, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA).  According to BrokerCheck records, Mr. Martin was permitted to resign amid allegations concerning FINRA’s Case No. 20150445876 which “appears to be centered around ETF trades.”

According to the FINRA Complaint, Mr. Martin violated FINRA Rules 2310 and 2111 related to suitability of recommendations by “not having a reasonable basis to recommend, for long-term holding, non-traditional exchange traded funds (‘Non-traditional ETFs’).”  The FINRA Complaint details that Mr. Martin believed the world economy was “on the precipice of catastrophe and his customers should invest and hold Non-traditional ETFs to hedge against the impending catastrophe.”

The FINRA Complaint detailed that ETF shares generally represent an interest in a portfolio of securities that tracks an underlying benchmark or index, such as the S&P 500.  Non-traditional ETFs differ in that they are more complex investment products that rely on strategies, such as interest rate swap agreements, futures contract, and other derivative instruments, to attempt to return a multiple and/or inverse of an underlying benchmark.  This would generally make non-traditional ETFs subject to more risk, and therefore may not be suitable for certain investors.

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding former stockbroker Clark Gardner.  According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Gardner is no longer FINRA licensed to sell investments.  He has also reportedly been the subject of no less than six reportable events, including customer complaints and regulatory investigations.

Per FINRA, Mr. Gardner was permanently barred by both FINRA and the SEC from the financial services industry.  The FINRA investigation of Mr. Gardner reportedly surrounded the conversion of $243,000 of customer funds.  Per his BrokerCheck report, Mr. Gardner also served as an agent for a real estate investment company without required approval of his firm.

Mr. Gardner has been the subject of customer complaints as well.  Customers have alleged that Mr. Gardner breached fiduciary duties and recommended unsuitable investments.  According to FINRA records, one customer dispute is presently pending, while another was settled for $263,000.

The investment and securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding Florida-based UBS stockbroker Brian J. Gold.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Gold has been the subject of no less than five customer complaints and was discharged from Morgan Stanley DW in 2004.

In addition to UBS and Morgan Stanley, FINRA reports that Mr. Gold has also been registered with Merrill Lynch in Florida, Advest in Connecticut, and Prudential in New York City.

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding former stockbroker Robert H. Potter.  According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Potter has been permanently barred by FINRA.  He has also reportedly been the subject of no less than three customer complaints.

Mr. Potter has reportedly been barred by FINRA for his failure to cooperate with an investigation into allegations that Mr. Potter comingled customer funds with his own personal funds.  Per FINRA, Mr. Potter was discharged from Cambria Capital in August 2015, after the firm questioned the validity of certain transactions involving Mr. Potter and his customers.

In 1997, Mr. Potter was the subject of a customer complaint alleging unauthorized, excessive trading, per FINRA.  FINRA records indicate that the customer recovered more than $66,000 as a result of their complaint.

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.

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.

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.