financial advisors

BROKER REPORT: Ameriprise’s Thomas E. Stratton-Crooke of Ohio Suspended By FINRA

September 25, 2015 | Malecki Law Team

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints financial advisor Thomas E. Stratton-Crooke of Ameriprise Financial Services, Inc., based out of Beachwood, OH.

Records from the Financial Industry Regulatory Authority (“FINRA”) indicate that Mr. Stratton-Crooke has been suspended by FINRA for 10 business days and fined $10,000 for improperly executing discretionary transactions in customer accounts without prior written authorization from the customer or authorization from his firm.

According to his BrokerCheck Report, Mr. Stratton-Crooke was discharged by Merrill Lynch in 2014, after 25 years with the firm, for what is believed to be the same misconduct that led to his suspension by FINRA.

LPL Financial Settles Disputes at Tune of $3.2 Million, More Fines May Be Coming

September 24, 2015 | Malecki Law Team

LPL Financial LLC has agreed to pay two more settlements, and these are big ones. On September 23, 2015, it was announced that LPL Financial entered into two settlements for disputes arising from the firm’s supervisory system over recommendations of alternative products, including non-traded real estate investment trusts (REITs). This time, LPL has agreed to pay $1.425 million to 48 States, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, according to a news release put out by the North American Securities Administrators Association (NASAA). Separately, it was reported that LPL agreed to pay Massachusetts and Delaware Attorneys General $1.8 million for placing 200 clients into leveraged exchange traded funds (ETFs). To top it off, it appears New Hampshire regulators continue to seek approximately $3.6 million from LPL arising from the sale of non-traded REITs, according to the Think Advisor article.

LPL Financial is no stranger to substantial fines for supervisory failures tied to alternative products. In May 2015, the Wall Street Journal reported that the Financial Industry Regulatory Authority (FINRA) fined LPL Financial $11.7 million over failing to properly supervise complicated products such as nontraditional ETFs. Malecki Law also noted in March 2014 that LPL was fined $950,000 by the over its supervisory failures stemming from recommendations of non-traded REITs and other illiquid investments. At that time, we posited the question whether the fines being assessed are large enough to deter future bad conduct? Time will tell. Malecki Law continues to represent and recover money for investors that suffered losses as a result of unscrupulous recommendations in non-traded REITs and other alternative products such as leveraged ETFs.

Non-traded REITs are particularly problematic and unsuitable products for many investors. Brokers like to recommend them because the products typically pay a high commission, but non-traded REITs are illiquid and may cause a substantial loss to the investor’s principal payment when buyers on secondary markets will only accept the products at a drastic discount to the actual price initially paid.

New FINRA Rule Designed To Help Protect Seniors And Other Vulnerable Investors

September 23, 2015 | Malecki Law Team

The Financial Industry Regulatory Authority (“FINRA”) has just approved steps to help protect senior citizens and other potentially vulnerable adults from financial exploitation and abuse. Referred to by some as a“pause rule,” the proposal would permit brokerage firms to place a temporary hold (or “pause”) a disbursement from a customer’s account if they believed that the customer was being exploited. After pausing the disbursement, the firm would contact the customer’s “trusted contact” to notify them of the suspicious activity. While the new rule would not require firms to place a temporary hold on disbursements, it would provide them with a safe harbor if and when the firm did pause suspicious activity.

With the baby boomer generation at or near retirement age, the timing for FINRA could not be better. FINRA’s CEO specifically referenced the fact that for the next 15 years, roughly 10,000 Americans will be turning 65 each day.

Unfortunately, senior citizens are targeted specifically by financial scammers. Seniors typically have large amounts of liquid assets in the form of retirement savings. When coupled with the potential for diminishing mental abilities, this means an easy target and potentially big payday for a con artist with bad intentions.

Leveraged ETFs Remain a Risky Investment, Not Suitable for Most Individual Investors

September 8, 2015 | Malecki Law Team

Investors who have been watching the recent financial news know that securities markets have become very volatile over the past month. Increased volatility in the markets makes leveraged products like Exchange Traded Funds (EFTs) and Exchange Traded Notes particularly risky for most individuals investors, as noted in a recent Wall Street Journal article published on September 4, 2015.

These securities products incorporate borrowed money (termed leverage in the securities industry), which has the effect of amplifying gains and losses tied to baskets of securities that are often concentrated in one industry or commodity.

Malecki Law has written about these products in the past, noting that broker-dealer firms such as Stifel, Nicolaus & Co., Inc. and Century Securities Associates Inc. were fined by the Financial Industry Regulatory Authority (FINRA) for making unsuitable recommendations to investors.

BROKER REPORT: John Smallwood of Commonwealth Financial

September 5, 2015 | Malecki Law Team

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.

BROKER REPORT: Joseph A. Miles Is the Subject of Third Customer Complaint

September 4, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Joseph A. Miles. Mr. Miles is believed to be currently employed and registered with St. Bernard Financial Services, Inc. based in Russellville, Arkansas. He was also previously registered with Clearing Services of America, Inc., American Capital Equities, Inc., Dominick & Dominick, Inc. and David Lerner Associates, Inc., according to industry records.

According to his BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA), Mr. Miles has been the subject of three recent customer complaints, including one complaint seeking $169,865.70 alleging that Mr. Miles sold bonds that declined in value, with damages granted of $100,000. The second most recent customer complaint alleged securities fraud, breach of fiduciary duty, common law fraud, and breach of contract related to South African Bonds which was settled for $75,000, according to FINRA records. The third complaint involved allegations of fraud, breach of contract and negligence and was settled after the death of the customer, per BrokerCheck records.

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

Seven Complaints Against Broker and Financial Advisor Jeffrey A. Fladell

August 28, 2015 | Jenice L. Malecki, Esq.

The securities fraud team at Malecki Law is interested in investigating possible claims on behalf of investors who have complaints regarding broker and investment advisor Jeffrey A. Fladell. Registered with RBC Capital Markets, Fladell has been the subject of multiple investigations, customer disputes and settlements since 1987, according to Financial Industry’s Regulatory Authority (FINRA’s) BrokerCheck.

In 2014, there was a customer complaint reported against Fladell for alleged unsuitable investments and overconcentration in municipal bonds which was adverse to their investment objectives, and the claimant was granted $75,000 in damages. In another customer complaint involving similar securities misconduct allegations, the customer dispute was settled for $1,000,000 in 2013. Previous complaints registered with FINRA against Fladell involve allegations of unsuitability, overconcentration and misrepresentation dating back to 1987.

In 1992, National Association of Securities Dealers (NASD) subjected him to a statutory disqualification as a result of his guilty plea to one misdemeanor count of submitting a false document to the IRS in connection with his income tax return. Fladell was previously registered with J.B. Hanauer & Co, Halpert and Company, Travelers Equities Sales, Swanton Securities, Hermes Securities and Bernard Schnitzer.

Senior-Aged Investors and other Conservative Investors Likely at Risk in Current Low-Yield Environment

August 26, 2015 | Malecki Law Team

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.

BROKER REPORT: Over Ten Customer Complaints Against Michael Fasciglione

August 20, 2015 | Malecki Law Team

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.

BROKER REPORT: Churning Complaints Regarding Dwarka Persaud

August 18, 2015 | Malecki Law Team

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.