FINRA

BROKER REPORT: Financial Advisor Barry D. Abrams

July 22, 2016 | Malecki Law Team

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.

FINRA Announces $950,000 Fine to Prudential Annuities Distributors, Inc. for Supervisory Failures

July 20, 2016 | Malecki Law Team

The Financial Industry Regulatory Authority (FINRA) announced on July 19, 2016 in a News Release that it had fined Prudential Annuities Distributors, Inc. $950,000 for “failing to detect and prevent a scheme that resulted in the theft of approximately $1.3 million from an 89-year-old customer’s variable annuity account. Prudential Annuities Distributors acts as a principal underwriter and distributing broker-dealer for life and annuity products issued by its affiliates.

According to the News Release, a former registered Sales Assistant named Travis Wetzel, who worked at LPL Financial, stole money from the elderly customer’s account by submitting to Prudential Annuities Distributors 14 forged annuity withdrawal requests. The News Release detailed that each month, from July 2010 to September 2012, Mr. Wetzel submitted 4 to 5 withdrawal requests totaling approximately $50,000. The News Alert detailed that all withdrawn funds were deposited into an account in Mr. Wetzel’s wife’s maiden name that was controlled by Mr. Wetzel.

Prudential Annuities Distributors consented to the fine by submitting a Letter of Acceptance, Waiver and Consent No. 2012034423502 (AWC). According to the AWC, each transaction submitted by Mr. Wetzel triggered an alert, or a “red flag,” putting Prudential Annuities Distributors on notice that his requests may be fraudulent. Each alert required that a person manually review and confirm each transaction, and for each transaction, personnel determined the activity appeared legitimate, according to the AWC. The AWC also noted that for 44 transfers, Prudential Annuities Distributors also determined that the withdrawn funds were paid to the customer, when they were not actually sent to the customer.

BROKER REPORT: Oppenheimer & Co.’s Joseph Iovino

July 19, 2016 | Malecki Law Team

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding Oppenheimer & Co. broker Joseph Iovino. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Iovino has been the subject of seven reportable disclosure events, including customer complaints.

Per FINRA records, Mr. Iovino has been involved in two regulatory events, four customer complaints and an employment separation after allegations.

According to his BrokerCheck, in 1992, Mr. Iovino was terminated by Prudential Securities for violating firm policy.

Malecki Law: In The News

July 18, 2016 | Malecki Law Team

This month, Malecki Law attorneys were awarded full net out-of-pocket damages of $142,168.00 by a Financial Industry Regulatory Authority (FINRA) Arbitration Panel. There has been a series of media reports on this, initially appearing in the InvestmentNews and followed by the Financial Times site Financial AdvisorIQ, and other websites. The claim was brought against Garden State Securities Inc. by Malecki Law on behalf of an elderly investor Anthony Romano on alleged charges of over-trading, over-concentration, and unsuitable investments.

This was another noteworthy investor case win for Malecki Law, who regularly brings claims against unscrupulous broker-dealers and holds them accountable for mismanaging investor’s accounts.

Elderly investors such as Mr. Romano find themselves especially at risk because once they lose their life’s savings to poor decisions made by brokers and securities firms, they do not have sufficient time to recoup their losses. The FINRA Arbitration panel also assessed that all forum fees in the amount of $14,400 will be paid by the respondent Garden State Securities, Inc.

Preferred Apartment Communities Inc.’s Nontraded Preferred Shares May Carry Risks for Investors

July 18, 2016 | Malecki Law Team

According to a recent InvestmentNews article, Preferred Apartment Communities Inc. began selling an investment known as a Nontraded Preferred Share after 2011. The article detailed that the investment is redeemable back to Preferred Apartment Communities Inc. after five years, and if the investor needs to redeem it before five years, they must pay a redemption fee that decreases over time. If the investor seeks to redeem during the first year, the redemption fee is 13%, according to the article.

Nontraded REITs (Real Estate Investment Trusts) have long been an area of concern for securities regulators like the Financial Industry Regulatory Authority (FINRA) because they are generally illiquid investments that pay high upfront commissions to the brokers who sell them.

Nontraded REITs pose suitability concerns for investors. Brokers who recommend them must make sure the investors are not over-concentrated in the investment, and that they have disclosed all of the risks associated with them, including the investment’s illiquid nature and the high fees earned, leading to questions of whether the investment is in the best interest of the investor.

BROKER REPORT: Joseph Amalfitano of Raymond James

July 15, 2016 | Malecki Law Team

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding Raymond James Financial Services broker Joseph Amalfitano of Malvern, PA. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Amalfitano moved to Raymond James after stints at Citigroup and Merrill Lynch.

Mr. Amalfitano was recently the subject of two customer complaints since 2008, per FINRA records.

According to his BrokerCheck, in 2012, Mr. Amalfitano was alleged to have “maintained an unsuitable concentration of Bank of America stock” in customers’ accounts. Overconcentration can be dangerous since it has the potential to create higher risk and volatility of an account when compared to a more balanced, diversified portfolio. FINRA records indicate this case was settled.

BROKER REPORT: Former Pruco Securities Financial Advisor Winston Wade Turner Barred from Associating with any FINRA Member

July 14, 2016 | Malecki Law Team

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.

Product Spotlight: AR GLOBAL REITs

July 13, 2016 | Malecki Law Team

Malecki Law’s team of investment attorneys are interested in speaking with those who invested in AR Global REITs. Industry analysts and consultants believe that investors in a number of AR Global-sponsored real estate investment trusts (REITs) are in danger of having their distributions cut, per InvestmentNews.

Specifically, investors in American Realty Capital Global Trust II, American Realty Capital New York City REIT, American Finance Trust, American Realty Capital Hospitality Trust, American Realty Capital Retail Centers of America, Healthcare Trust, and Realty Finance Trust may be at risk, according to the report.

The problem is said to stem from the MFFO (modified funds from operations a/k/a cash flow) at seven of AR Global’s REITs. The MFFO of these seven funds reportedly failed to match or exceed their distributions. In simple terms, this would mean that the funds failed to take in as much as they were distributing. Such a situation has the potential to mean big trouble for investors including distribution cuts and rapid decline in asset value – i.e., less income and large losses to the principal.

BROKER REPORT: Financial Advisor Geri Delfino

July 12, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Geri Delfino. Ms. Delfino had been employed and registered with Ameriprise Financial Services, Inc., a broker-dealer, from October 2009 to November 2015, according to her publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority.

Per her BrokerCheck report, Ms. Delfino was previously employed by Ameriprise Advisor Services, Inc. from 2006 to 2009, Advest, Inc. from 2000 to 2006, and A.G. Edwards & Sons, Inc. from 1991 to 2000.

Ms. Delfino was fined and suspended for 20 days from association with any FINRA member broker-dealer by FINRA according to a Letter of Acceptance, Waiver and Consent No. 2015047790401 (AWC). According to the AWC, Ms. Delfino violated NASD Conduct Rule 2510(b) (Discretionary Accounts) and FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade) for:

Malecki Law Obtains Full Net Out-Of-Pocket Damages for Senior-Aged Client in FINRA Arbitration

July 8, 2016 | Malecki Law Team

We are pleased to announce that after a six-day long arbitration, our client was awarded his full net out-of-pocket damages of $142,168.00 by a Financial Industry Regulatory Authority (FINRA) Arbitration Panel. The story was recently reported by InvestmentNews. The arbitration panel also assessed all forum fees in the amount of $14,400 against the Respondent Garden State Securities, Inc.

The case was brought against Garden State alleging unsuitable investment recommendations, including over-concentration in Chinese stocks, penny stocks and low-priced securities, as well as leveraged exchange traded funds (ETFs). The claims also centered around allegations of churning and excessive trading. In the end, the Panel found Garden State liable. Ultimately, broker-dealers must be held responsible for the recommendations their brokers make.

Our client’s case exemplifies many of the issues facing senior-aged investors today. Many seniors find themselves in situations where they have saved their entire lives for retirement and are seeking a financial professional to help guide them and preserve their nest egg. There is usually a lot of trust in the financial advisor-client relationship. But that trust can be easily and quickly abused. As they grow older, people generally became more conservative, downsizing and limiting expenses. Yet, all-too-frequently brokers recommend more speculative investments to their aging customers – for the broker’s own purposes (commonly higher commissions and fees). Such a situation is not appropriate nor permissible.