FINRA

Broker Report: David H. Bindelglass of Morgan Stanley

December 12, 2015 | Malecki Law Team

The investment fraud attorneys at Malecki Law are investigating potential claims by investors against Morgan Stanley stockbroker David H. Bindelglass. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Bindelglass, who works out of Morgan Stanley’s Paramus, New Jersey branch, has been the subject of at least three customer complaints.

Mr. Bindelglass is believed to have regularly recommended investments in Puerto Rican bonds to his clients. It is believed that Mr. Bindelglass may have recommended such investments in high concentrations. In high concentrations, even investments believed to be “safe” can be unsuitable and result in significant losses. If a financial advisor recommends investments in a concentration that is unsuitable, the investor may be entitled to recover some or all of their losses.

According to FINRA records, since 2006, Mr. Bindelglass has been accused by at least three different customers of recommending unsuitable investments. In each case, FINRA records indicate that those investors were able to recover for their losses.

This Week At Malecki Law

November 20, 2015 | Malecki Law Team

The experienced Securities attorneys at Malecki Law managed to secure a major win on behalf of one of their international clients. They managed to secure a summary judgment dismissal for a Chinese businessman, a well-known inventor and public figure in China, who was being sued in excess of $30 million for being the controlling shareholder of a company that went out of business. The opposing counsel was Weil, Gotschal & Manges LLP.

Today, Ms. Jenice Malecki is the Chair at a FINRA mock arbitration for St. John’s students. She has actively mentored students over the years from different law schools through lectureships and speaking engagements.

Malecki Law Attorneys Spread Awareness About Elder Exploitation

October 27, 2015 | Malecki Law Team

The Securities Fraud attorneys at Malecki Law today visited the Hudson Guild Senior Center to educate members of their Naturally Occuring Retirement Community (NORC) about Elder Financial Exploitation. Adam Nicolazzo and Robert Van de Veire addressed a group of 15-20 senior members of that community about investment fraud, common red flag signs of fraud, and how to protect their retirement income and nest eggs.

According to FINRA, the elderly lose approximately $ 2.9 billion every year due to fraud. The Malecki Law attorneys try to create awareness within communities of elders about dangers of elder financial exploitation and empower them to take legal recourse if they are victimized. The seniors get educated about regulatory authorities like FINRA and SEC, and tools like BrokerCheck available to them. The Malecki Law team used real life examples of Ponzi and affinity schemers, who are known to have preyed on the elderly, to help senior members understand the realities of financial fraud and that it comes in many forms. They also offer free consultation and case evaluation in these sessions.

Malecki Law continues to work towards positive changes in elder law within the securities industry and Jenice Malecki recently participated in a panel on Dangers of Diminished Capacity at the Public Investors Arbitration Bar Association’s (PIABA) annual conference.

PIABA Study Reveals that FINRA’s Effort to Curb Broker Record-cleansing Has Not Been Met With Success

October 26, 2015 | Malecki Law Team

According to Public Investors Arbitration Bar Association’s (PIABA) latest report, FINRA’s efforts to curb broker expungement and clear records of misconduct have failed to reduce the number of times it occurs. According to PIABA, between, 2012-14 expungement was granted in 87.8% of cases in which it was sought.

When brokers are granted expungement for alleged wrongdoings, this record is wiped out from FINRA’s BrokerCheck and FINRA is concerned that it might cause an impression about the broker’s ethic that is misleading.

Since 2014, FINRA has increased arbitrator guidance and training and introduced rules that prohibit arbitration settlements with expungement as a condition. FINRA has sought to grant expungement as an “extraordinary remedy” only to be available in cases where the broker’s record has no value for investor protection. FINRA’s arbitration task force is considering creating a Special Arbitration Panel comprised of specially trained arbitrators to make decisions on expungement requests.

BROKER REPORT: Jeffrey G. Lyon, formerly of Joseph Gunnar & Co.

October 2, 2015 | Malecki Law Team

The securities fraud attorneys are interested in hearing from investors with complaints involving Jeffrey G. Lyon. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Lyon is no longer a registered stock broker. Per BrokerCheck, Mr. Lyon was last licensed to sell investments through FINRA in 2013 when he was registered with Joseph Gunnar & Co LLC.

Mr. Lyon’s BrokerCheck Report also indicates that he has been the subject of at least two customer complaints in his final three years in the brokerage industry. Per FINRA, the complaints against Mr. Lyon have alleged unsuitable investment recommendations and unauthorized trading.

In addition to Joseph Gunnar & Co., Mr. Lyon has also reportedly been registered with Charles Vista LLC and John Thomas Financial. Both of these firms were expelled by FINRA in 2014 and 2013, respectively, per FINRA records.

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.

BROKER REPORT: Cambria’s Robert H. Potter, Discharged and Barred

September 24, 2015 | Malecki Law Team

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.

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.

BROKER REPORT: Former California-based Raymond James Broker James Belenis Suspended by FINRA

September 23, 2015 | Malecki Law Team

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker James D. Belenis of KMS Financial Services, Inc., based out of Davis, CA. and previously of Raymond James Financial.

Mr. Belenis has been suspended by the Financial Industry Regulatory Authority (“FINRA”) for a period of 20 days and fined $5,000 for his activities in connection with the improper raising of capital for a gold mining operation, according to FINRA.

Before joining KMS, Mr. Belenis was discharged from Raymond James for engaging in unauthorized private securities transactions away from the firm, per FINRA. These are believed to be the same activities for which he was suspended.