investment fraud

FINRA Announces Complaint Filed Against Hank Mark Werner Alleging Churning of Elderly and Blind Client’s Account

August 1, 2016 | Malecki Law Team

The Financial Industry Regulatory Authority (FINRA) announced today a complaint filed against Hank Marker Werner for allegations including securities fraud for churning the account of a senior-aged blind widow customer and for making excessive and unsuitable trading recommendations in a News Release.

According to his publicly available BrokerCheck report records maintained by FINRA, Mr. Werner was employed and licensed by Legend Securities, Inc. from December 2012 to March 2016. Prior to working at Legend Securities, Inc., he was employed by Liberty Partners Financial Services, LLC from July to December 2012, Brookstone Securities, Inc. from March 2011 to June 2012, and Alexander Capital, LP from November 2009 to March 2011, per Mr. Werner’s BrokerCheck report.

FINRA’s News Release detailed that Mr. Werner allegedly engaged in a deceptive and fraudulent scheme by churning the elderly client’s over the course of three years “to maximize his compensation by charging more than $243,000 in commissions, while causing the customer approximately $184,000 in net losses.” The News Release also stated:

Broker Report: Steven Syslo

July 26, 2016 | Malecki Law Team

The attorneys at Malecki Law are interested in hearing from customers of Steven Syslo who were recommended investments in SandRidge Energy, Inc. as a safe investment, or suitable for conservative investors. Mr. Syslo was employed by Morgan Stanley from June 2009 to June 2016, according to his publicly available BrokerCheck report maintained by the Financial Industry Regulatory Authority (FINRA). As disclosed in his BrokerCheck report, Mr. Syslo is currently employed by UBS Financial Services, Inc.

In July 2011, SandRidge Energy, Inc. traded at around $12 per share. The company announced that it was filing for bankruptcy protection on May 16, 2016, as reported by the Wall Street Journal. According to the article, SandRidge Energy is an Oklahoma City-based driller, and is the latest oil and gas company to file for bankruptcy in 2016. Now, the company’s stock trades for pennies, and it is the company’s stockholders, including individual investors, who may be feeling the effects of substantial losses in their portfolios.

Broker-dealer firms such as Morgan Stanley are obligated by the securities laws and industry rules to ensure that recommended investments are suitable for each investor. Brokers must consider each investor’s age, tax status, net worth, investment experience and risk tolerance, among other factors. Investments in commodities such as oil and gas companies are generally considered to be risky investments. If investors were seeking conservative, stable investments, but were recommended oil and gas stocks or limited partnership interests, they may have claims for damages for unsuitable investments.

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.

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.

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: Sterne Agee’s Chad Karl

July 11, 2016 | Malecki Law Team

Malecki Law’s team of investment attorneys are interested in hearing from investors who have complaints regarding Wisconsin-based Sterne Agee Financial Advisor Chad Karl.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Karl is currently the subject of a pending customer dispute. The allegations include unsuitable investment recommendations, including an investment into real estate, per FINRA. According to the disclosures on Mr. Karl’s BrokerCheck, the customer is requesting $100,000 in damages.

Mr. Karl’s FINRA records indicate that he has also been the subject of two prior customer disputes since 2010. In 2014, a client alleged that “the non publicly traded REIT sold to her was unsuitable,” per FINRA. This case was reportedly settled for $50,000. The other customer complaint, filed in 2010, alleged $120,000 in damages for failure to “fully explain tax laws regarding the sale of the client’s stock portfolio,” according to BrokerCheck, and was ultimately withdrawn.

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.

BROKER REPORT: Financial Advisor Catherine A. Sheridan Named in Arbitration Proceedings

July 6, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Catherine A. Sheridan. Since April 2015, Ms. Sheridan has been employed and registered with Race Rock Capital, LLC, a broker-dealer, working out of the Boston, Massachusetts office, according to her publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA).

Per her BrokerCheck report, Ms. Sheridan was previously employed by North South Capital, LLC from 2010 to 2015, Sound Securities, LLC from 2007 to 2010 and Tradition Asiel Securities, Inc. from 2004 to 2007.

Ms. Sheridan was fined and suspended for two months from association with any FINRA member broker-dealer by FINRA according to a Letter of Acceptance, Waiver and Consent No. 2015044475901 (AWC). According to the AWC, Ms. Sheridan violated Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010 for failing to timely file amendments to her U-4 to report tax liens. According to the AWC, Ms. Sheridan resigned from North South Capital, LLC two days after she amended her U-4 to report a tax lien. According to FINRA BrokerCheck records, Ms. Sheridan’s suspension started on May 16, 2016 and ends on July 15, 2016.

BROKER REPORT: Wells Fargo’s Robert Ross

July 1, 2016 | Malecki Law Team

The investment and securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding Wells Fargo financial advisor Robert Ross. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Ross recently moved to Wells Fargo after spending 30 years at Merrill Lynch.

Mr. Ross was recently the subject of a customer complaint alleging unsuitable investment recommendations and excessive trading, per FINRA records. BrokerCheck indicates that an arbitration related to this customer complaint is presently pending.

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: FINRA Files Case Against Financial Advisor Richard William Martin for Recommending Non-Traditional ETFs

June 30, 2016 | Malecki Law Team

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.