Articles Tagged with Securities America

Last week, Malecki Law filed an amended FINRA arbitration complaint against Securities America on behalf of victims claiming that the broker-dealer’s inadequate supervision over its registered representative, Hector May, permitted his alleged Ponzi Scheme to happen. Securities America failed to act as Hector May sold fictitious “tax-free” corporate bonds from his New City Securities America office with his Securities America approved Registered Investment Advisory business, Executive Compensation Planners. The amended complaint adds two pension plans as additional plaintiffs joining the original nine victims specified in the June 18th filing. Our announcement of the filing to the press piqued the interest of the media including a reporter who interviewed attorney Jenice Malecki for an article in Lohud, as well as an article in Financial Planning magazine.

Hector May was formerly a Securities America registered representative, who reportedly managed more than $18 million in assets according to his Form ADV. Before the alleged Ponzi scheme surfaced, Hector May was an influential community member who donated to charities and political candidates. Claimants alleged that Hector May simply used his community status to issue, solicit and sell these non-existent securities products. Now, Hector May is being investigated by multiple government agencies for alleged fraud resulting in millions of dollars bilked from unsuspecting investors. Of course, Hector May refuses to provide answers regarding the whereabouts of the invested funds or any further details about the transaction activities in dispute.

The amended complaint now alleges that Hector May also stole money from two New York company’s pension plans while running his Securities America branch office.  The newly added pension plans’ beneficiaries were allegedly sold fictitious “tax-free” corporate bonds. Hector May allegedly told company beneficiaries not to worry since their invested money would be in “safe places” under his RIA with Securities America. Hector May’s reassuring comment could not be further from the truth, hidden by his falsely produced employee benefit plan and annual reports. Consequently, company employees have been defrauded out of millions of dollars that had been intended to be their income upon retirement.

Malecki Law was featured in the news for filing a FINRA arbitration claim on behalf of investors alleging that Securities America failed to perform proper supervisory duties as their formerly registered broker, Hector May allegedly operated a Ponzi Scheme. In the Financial Planning article, investor fraud attorney Jenice Malecki provides additional information and commentary on her representation of nine clients against Securities America. Financial Planning provides breaking and daily news coverage as well as analysis to help independent financial advisors better their business, practice and client services. Readership often includes independent broker-dealers, financial planners and other industry professionals seeking insights into the highly regulated securities industry. Malecki Law spoke with Financial Planning to spread the message so that other innocent victims who lost their hard-earned savings may seek justice.

Investor fraud attorney, Jenice Malecki released more details regarding the specific allegations relating to Hector May’s allegedly fraudulent practices against investing clients to Financial Planning in hopes of raising awareness. Allegedly, victims of the New City broker’s Ponzi scheme were under the impression that Hector May invested their money into “tax-free” bond products from firms like General Electric. The clients later learned alleged Ponzi Schemer’s “tax-free” bond products were non-existent and apparently just words on false account statements.  When asked for a comment, Hector May’s attorney declined to provide a comment regarding a case started by a law firm placing ads in the newspaper for clients.

The clients are filing the claim only against Securities America since Hector May already had assets frozen and could not pay the award, Jenice Malecki commented.  FINRA rules place broker-dealers at fault for investment losses resulting from their failure to properly supervise and detect a Ponzi Scheme committed by their registered representative. Securities America had an obligation to monitor Hector May’s activities, including the fraud that transpired. Clients are claiming that Securities America missed many “red flags” that would have clued off a Ponzi Scheme.

Malecki Law filed an expedited FINRA arbitration complaint today on behalf of nine investors from Upstate New York, Northern Virginia and Long Island, New York alleging that Securities America, Inc. failed to supervise its registered representative Hector May and failed to audit his remote Securities America office, which it is alleged in essence allowed his alleged Ponzi-type fraud to persist for many years. Through these alleged supervisory shortcomings, it is alleged that Securities America’s Inc. aided and abetted fraudulent practices conducted by its registered representative as well as in his disclosed, approved SEC-registered investment advisor, Executive Compensation Planners, Inc. “At some point, a license to sell securities can become a license to steal when there is inadequate supervision of these remote brokerage firm offices,” offered well-known securities attorney Jenice Malecki.

Executive Compensation Planners was supposed to solicit wrap fee programs through Securities America, according to its Form ADV filed with the SEC.  Instead, as alleged in the FINRA pleading, Hector May had wires sent and checks written directly to Executive Compensation Planners; created fictitious statements; and pocketed client funds. Hector May reported managing $18 million in his Form ADV. Mr. May’s FINRA BrokerCheck report indicates that Hector May, who had been with Securities America since 1998, was terminated for misappropriation of clients’ assets just after the Department of Justice initiated a criminal investigation into his suspected felony, along with investigations by the U.S. Postal Inspectors and the United States Securities and Exchange Commission.

Prior to his alleged conduct coming to light, Hector May was widely known with an excellent reputation within his New York Community, often sponsoring charities – “clients now want to know if he was using their money to be charitable,” said Jenice L. Malecki, Esq., a securities lawyer in New York.  Mr. May’s wife, daughter and other family members are alleged to have worked with him.

Per reports, William Galvin, the Secretary of the Commonwealth of Massachusetts, recently filed complaints against Securities America and its broker Barry Armstrong over allegedly misleading advertisements that targeted vulnerable seniors.

Securities America allegedly participated in and failed to supervise Mr. Armstrong, in conducting a misleading radio advertising campaign.  In what has been described as a “bait and switch” technique, Mr. Armstrong reportedly ran the Alzheimer’s disease ads as a pretext to obtain the contact information needed to sell another service.

Mr. Armstrong, who hosts his own radio show, was said to have run ads on various AM radio stations that instructed listeners to call him for free information on Alzheimer’s disease.  Once listeners called in, their contact information was allegedly used to advertise financial services. According to reports, these deceptive ads were submitted to Securities America for review and were all approved by the firm.