financial advisors

BROKER REPORT: Merrill Lynch’s Paul F. Kane

June 29, 2016 | Malecki Law Team

Malecki Law’s team of investment attorneys are interested in hearing from investors who have complaints regarding long-time Merrill Lynch Financial Advisor Paul F. Kane.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Kane is currently the subject of a pending customer dispute. The allegations include unsuitable investment recommendations, excessive trading and misrepresentation and omission of material facts, per FINRA. According to the disclosures on Mr. Kane’s BrokerCheck, the customer is requesting $1.1 million in damages.

Excessive trading, also known as churning in the industry, can be disastrous for a portfolio. When a broker trades an account excessively, large amounts of commissions and fees may be generated, if the account is commission based (as opposed to fee based). Churning is a classic example of a broker putting his or her own monetary gain above the best interests of his or her customer.

BROKER REPORT: Financial Advisor Kenneth Daley Barred from Conducting Securities Business

June 28, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Kenneth Daley. Mr. Daley was employed and registered from October 2007 to June 2016 with Merrill Lynch, Pierce, Fenner & Smith, Inc., a Garden City, New York broker-dealer, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA). According to BrokerCheck records, Mr. Daley voluntarily resigned from Merrill Lynch amid allegations that he was involved in “[c]onduct involving improperly receiving money from a client via checks written from an outside account.”

Per his BrokerCheck report, prior to his employment and subsequent resignation from Merrill Lynch, Mr. Daley was employed by Wachovia Securities from 2003 to October 2007.

Subsequent to his resignation, Mr. Daley was barred from association with any FINRA member broker-dealer on June 27, 2016 by FINRA, after submitting a Letter of Acceptance, Waiver and Consent No. 2016050129701 (AWC). According to the AWC, Mr. Daley violated:

Risky Investments Begin to Show Losses in Wake of Brexit

June 27, 2016 | Malecki Law Team

The Bexit vote in Britain appears to be exposing fault lines across various investments. The Wall Street Journal reported today that emerging market currencies are taking on steep losses a day after Britain voted to leave the European Union, termed Brexit. According to the article, this comes as the British Pound dropped to a thirty year low and Standard & Poor’s downgraded the U.K. down from Triple-A status.

Other investments are also showing strain, including oil, and foreign companies, including European banks. These investments are often packaged into products such as exchange traded funds or limited partnerships, which are generally considered risky and not suitable for certain investors.

For instance, we have commented in recent blog posts that oil and gas limited partnerships are not appropriate for investors that cannot afford to have a significant portion of their portfolio locked up in such an illiquid investment that generally pays high commissions to the brokers who recommend them.

BROKER REPORT: Former Legend Securities Financial Advisor Walter Marino

May 26, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Walter Marino. Mr. Marino is currently employed and registered with Lincoln Investment, a broker-dealer, working out of the Dix Hills, New York office, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA).

Per his BrokerCheck report, Mr. Marino was previously employed by Legend Securities from 2002 to August 2015, when he was discharged after the “Firm discovered what [Mr. Marino] represented as a non-replacement [variable annuity] sale was in fact a replacement.” Prior to his employment and subsequent termination from Legend Securities, Mr. Marino left Brill Securities in 2001 by “voluntary resignation” amid allegations of unauthorized trading activity and disregarding a customer’s investments, according to BrokerCheck.

Currently, according to BrokerCheck records, it appears Mr. Marino is a registered broker in Connecticut, New Jersey, New York and South Carolina.

Trust Funds: Potential Playground for Abusive Financial Advisors

May 9, 2016 | Malecki Law Team

Trust Funds are an especially susceptible vehicle for fraud committed by FINRA registered stock brokers and financial advisors. Two of the primary issues in such cases are “conflict of interest” and “breach of fiduciary duty.”

Trust funds can be created for a wide variety of reasons. Frequently, though, they are used as a means to afford an orderly transfer of wealth to a younger generation. They can offer a whole host of benefits that would make a trust fund the preferred choice over an outright gift. For example, the recipient/beneficiary may be very young, and the trust could afford some level of control or stability to prevent the beneficiary from squandering the money. Another reason may be certain tax advantages offered by the trust structure that would not be available in an outright give.

Regardless of the reason or reasons for its creation, a trust is going to need a trustee. The trustee is the party responsible for overseeing the trust and managing its assets. While trusts can hold different types of assets, they frequently contain securities, like as stocks and bonds. Therefore, such trusts would, by necessity, involve brokerage accounts. In that case, clients will oftentimes look to their stockbroker/financial advisor to put on a “second hat” and serve as trustee. The logic being “I already trust him/her with my money so why not let them be the trustee.” However, this is where significant problems can be created.

FINRA’s 2016 Priorities: FINRA is Searching for Sales Practice Issues

February 11, 2016 | Malecki Law Team

Brokers beware; FINRA is watching your firm, and you. Becoming embroiled in a regulatory inquiry or investigation can become a major and costly headache and impediment to registered representatives’ business.

In January 2016, the Financial Industry Regulatory Authority (FINRA) released its annual list of priorities, showing what sorts of sweeps they may perform, and investigations they may bring, in the coming year. brokers working in the securities industry should be aware of the priorities that are relevant to them, including those having to do with sales practice.

FINRA’s 2016 Priorities make clear that they intend a top-down review of the following areas, which may lead to firm-wide or broker specific investigations, including:

SEC Announces 2016 Priorities that Involve Securities Industry Participants

February 5, 2016 | Malecki Law Team

The sad truth is that the Government loves the easy kill. It is often easier for regulators to extract settlements and punishments against smaller market participants, including brokers, traders and analysts, than the giant wire houses, because large companies can match the resources of the Government.

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), among other regulators, regularly engage in investigations to explore, deter and punish market conduct that violates the securities laws and industry rules. While it can be hard to know what those investigations will be, the regulators like the SEC disclose regulatory priorities on an annual basis. These examination priorities are areas where the SEC will be dedicating resources throughout 2016.

Of the 2016 Priorities announced by the SEC, the following may lead to broad investigations:

FINRA FOCUS: Senior Investors

February 4, 2016 | Malecki Law Team

FINRA’s recently released Regulatory and Examinations Priority Letter made specific mention of multiple critical areas that the regulator will be focused on for the upcoming year. The one that we will focus on today is the Senior investor and the steps that are and should be taken to prevent elder abuse.

As we have discussed here before, with the growing population of senior aged investors, this demographic is becoming increasingly significant in the retail investor pool nationwide. Baby boomers are beginning to hit retirement age just as advancements in technology and medicine are leading to longer and longer lifespans.

Per 2012 census data, there are 76.4 million baby boomers which represent close to one-quarter of the then estimated U.S. population of 314 million. These figures have coupled with longer lifespans across the boards, means that there is the potential for disaster if baby boomers’ retirement savings are not properly managed. FINRA recognizes that “the consequences of unsuitable investment advice can be particularly severe for this investor group since they rarely can replenish investment portfolios with fresh funds and lack the time to make up losses.”

BROKER REPORT: M&T Securities Financial Advisor Christopher T. Fenton

January 26, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Christopher T. Fenton. Mr. Fenton is currently employed and registered with M&T Securities, Inc., a broker-dealer, working out of the Buffalo, New York office, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority. He was also previously registered with Pruco Securities Corporation.

According to his BrokerCheck report, Mr. Fenton has been the subject of three customer complaints while employed by M&T Securities, Inc. The latest customer complaint led to a FINRA arbitration proceeding, according to BrokerCheck records. The BrokerCheck records reveal that the customer alleged that misrepresentations, breach of fiduciary duty and recommendation of unsuitable investments were made. The dispute resulted in an award to the customer, according to the BrokerCheck report.

A review of the award, publicly available from FINRA’s website, discloses that the claimant also alleged that the causes of action related to an M&T Portfolio Architect Account and Rochester Fund Municipals. The award also disclosed that Mr. Fenton and his firm were found to be jointly and severally liable to the claimant for the award, as well as a portion of fees the claimant incurred in bringing the claim.

BROKER REPORT: Scott Teich of Raymond James in Florida

January 15, 2016 | Malecki Law Team

The securities and investment fraud attorneys are interested in hearing from investors with complaints involving Scott Teich of Raymond James. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Teich is a registered stock broker with Raymond James, based out of Florida.

Mr. Teich’s BrokerCheck Report indicates that he has been the subject of at least six customer complaints. He has also reportedly been the subject of an “employment separation after allegations.”

In addition to Raymond James, Mr. Teich has also been registered with Gruntal & Co., First Colonial Securities, Paragon Capital Corp (which FINRA reports was “expelled” from FINRA in 2004).