unauthorized trading

FINRA Broker Charged for Churning Multiple Accounts, Even on the Day of a Customer’s Death

February 28, 2019 | Malecki Law Team

Formerly registered broker James Bradly Schwartz is facing charges in a FINRA disciplinary proceeding for allegedly churning customers’ accounts while a registered broker employed with Aegis Capital Corp between August 2014 and May 2016. In this quite brief period, Schwartz allegedly executed around 535 trades in these customer accounts, many of which were unauthorized. The FINRA complaint alleges that Schwartz violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder as well as FINRA rules 2010, 2011 and 2020. His alleged victims include a married couple, engineer, estate executer and a deceased individual. It is alleged that Schwartz even made unauthorized and excessive trades while one of the victims was dying in the hospital. Our securities law team is appalled to hear that possibly two unauthorized transactions were made in this customer’s account less than an hour after he passed away.

Churning is a fraudulent activity in which the broker makes excessive trades in light of the customer’s investment objectives. Common signs of churning in investment accounts are high broker commissions and significant investor losses. While Mr. Schwartz’s customers allegedly lost at least $660,000, Schwartz is reported as having pocketed over $194,000 sales credits and commissions, with annualized turnover rates ranged from 19.9 to 54.7 and annualized cost-to-equity ratios between 87% and 120%. These percentages are above average for their proclaimed non-speculative investment objectives. In an alleged effort to conceal his purported nefarious activities, Schwartz allegedly traded on a riskless principal basis. Trading on a reckless principal basis does not explicitly report the commission costs on customer’s account statements. Our securities attorneys believe that if such measures to hide his activity is true, Schwartz most likely acted with intent to defraud, which fulfilling the churning legal requirement of “scienter”.

This current FINRA disciplinary proceeding is not the first time that Schwartz has been accused of fraudulent activity. In his 18 years in the securities industry, Schwartz accumulated 12 disclosures on his official CRD records, publicly available on Broker Check. Each of the nine customer disputes mentioned on Schwartz’s BrokerCheck reference at least one allegation pertaining to unsuitability, unauthorized trading, or churning. Our New York securities attorneys encourage investors to think twice before working with brokers that have that many negative disclosures mentioned on their records. Even before Schwartz was a registered representative with Aegis Capital Corp for three years in June 2013, he procured a seemingly shady record that should have raised many flags. It is a matter of grave concern that Schwartz may have continued to gain new employment after so many customers made some of the same allegations.

BROKER REPORT: Financial Advisor Matthew Maczko

February 14, 2017 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Matthew Maczko. Mr. Maczko was employed and registered with Wells Fargo Advisors, LLC, a national broker-dealer out of the firm’s Oakbrook, Illinois, from February 2008 to September 2016, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA). He was previously registered with UBS Financial Services, Inc. from November 1998 to March 2008, according to BrokerCheck records.

In 2017, Mr. Maczko was permanently barred from association with any FINRA member broker-dealer by FINRA, after submitting a Letter of Acceptance, Waiver and Consent No. 2016050430201. According to the AWC, Mr. Maczko violated NASD Rule 2310 and Rule 2111, both pertaining to suitability of investment recommendations, because from 2009 to 2016, Mr. Maczko “effected excessive transactions in four brokerage accounts of [a] customer … who is now 93 years old,” and “during this period, Maczko effected over 2800 transactions in these accounts that generated approximately $581,650 in commissions, $84,270 in other fees, and approximately $397,000 in trading losses.” As the AWC went on, “[t]his level of trading was unsuitable.”

FINRA Suitability Rules require that recommendations made by the broker to the customer be suitable. This means that the broker must consider the investor’s age, investment experience, age, tax status, other investments, as well as other factors when making a recommendation to buy or sell securities.

BROKER REPORT: Financial Advisor Solomon David Krispeal

February 2, 2017 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Solomon David Krispeal. Since January 2016, Mr. Krispeal has been employed and registered with PHX Financial, Inc., a Hauppauge, New York broker-dealer, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA). He was previously registered with Legend Securities, Inc. from March 2013 to February 2016, Aegis Capital Corp. from April 2012 to March 2013 and with John Thomas Financial from January 2008 to April 2012, according to BrokerCheck records.

In 2017, Mr. Krispeal was fined and suspended from association with any FINRA member broker-dealer for 30 days by FINRA, after submitting a Letter of Acceptance, Waiver and Consent No. 2014042764601. According to the AWC, Mr. Krispeal violated FINRA Rule 1122 (Filing of Misleading Information as to Membership or Registration) and Rule 2010 (Standards of Commercial Honor and Principles of Trade) because he did not disclose an arbitration he was named as a respondent in, and when he did make the disclosure, he “inaccurately disclosed that the matter was ‘withdrawn,’ rather than ‘settled.’” FINRA Rule 1122 require that brokers and brokerage firms accurately disclose information regarding membership and registration to FINRA and correct any filings when required.

In addition to this regulatory matter, Mr. Krispeal has been made the subject of seven customer complaints, including two matter that have resulted in a settlement or an award, according to BrokerCheck records. In one case (FINRA Case No. 13-00830) where which Mr. Krispeal was listed as a respondent and the customer made allegations of unauthorized trading, unsuitability and churning, the customer was awarded $75,000 (nearly all of the stated damages of $95,000), according to FINRA Dispute Resolution records. Mr. Krispeal’s BrokerCheck Report also disclosed that the second case resulting in settlement concerned a customer’s allegations of unauthorized trading and alleged forgery.

FINRA Sanctions Broker James Speno

January 31, 2017 | Malecki Law Team

According to publicly available BrokerCheck records, James Carolan Speno (CRD#431912), a New York based securities broker, formerly associated with Morgan Stanley, was recently barred by FINRA. Attorneys at Malecki Law are interested in hearing from investors who have complaints against James Speno.

Mr. Speno has spent over 45 years as a securities advisor. His most recent registration was with Morgan Stanley in New York. Prior to that he was registered with Oppenheimer & Co.; RBC Capital Markets Corporation; Salomon Smith Barney Inc.; Lehman Brothers Corp.; Merrill Lynch, Pierce, Fenner & Smith Inc., Sussex Securities Incorporated; Lehman Brothers Incorporated.

Mr. Speno is currently not registered with any firm.

Two Wells Fargo Brokers Barred from the Securities Industry

January 23, 2017 | Malecki Law Team

Wells Fargo financial advisors, David Jeremy Welty and Ane Plate have been barred from the securities industry by FINRA and the SEC, respectively, per AdvisorHUB. Both advisors were accused of stealing customer funds.

Welty was alleged to have converted $8,700 for personal expenses from an account that was originally set up as a “memorial fund,” according to reports. Prior to his termination in December 2016, Welty worked in the Wells Fargo branch in Norristown, PA, beginning in March 2012, according to records. He reportedly consented to the bar without admitting nor denying the allegations.

Plate was accused of stealing $176,000 that was raised through the sale of securities from elderly clients’ account without authorization. According to the AdvisorHUB report, the pilfered money was allegedly used to pay Plate’s mortgage and upgrade her home. Records indicate that Plate worked at the Wells Fargo office in Deltona, FL from 2005 through 2014. Earlier this month, she was reportedly sentenced to 27 months in federal prison.

BROKER REPORT: Anthony Joslin

August 26, 2016 | Malecki Law Team

The investment and securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding Garden State Securities financial advisor Anthony Joslin.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Joslin was most recently with JP Turner & Co and Grayson Financial. Grayson Financial has since been expelled by FINRA according to industry records.

Mr. Joslin has at least seven customer disputes and 2 regulatory events in his history, per FINRA.

FINRA Files Complaint Against Broker Craig Dima for Unauthorized Trades in a Senior Citizen’s Securities Account

August 22, 2016 | Malecki Law Team

It was reported by Reuters on August 20, 2016 that the Financial Industry Regulatory Authority (FINRA) filed a complaint against a broker alleging that they broker engaged in unauthorized trading in the account of a senior aged investor.

According to the Reuters Article, the investor was a 72 years old retiree, and the broker, Craig Dima allegedly charged $376,000 in fees and commissions after making repeated unauthorized trades of the investor’s blue-chip Colgate-Palmolive Co. stock. The Reuters article further detailed that the inappropriate trading costed the client a further $127,000 in lost dividend payments, as well as a further $72,000 in losses when the broker sold the stock and then purchased it back later at a higher price. According to the Reuter’s article, the trading in the client’s account made up about 80% of Mr. Dima’s annual commissions.

Mr. Dima is currently employed and registered with the brokerage firm K.C. Ward Financial, out of Ronkonkoma, New York, and has been registered there since September 2009, according to his publicly available BrokerCheck report. Prior to working at K.C. Ward Financial, he was registered with American Capital Partners, LLC from November 2008 to December 2009, Andrew Garrett, Inc. from November 2004 to November 2008 and L.H. Ross & Company, Inc. from May 2003 to December 2004, according to Mr. Dima’s BrokerCheck records.

BROKER REPORT: Financial Advisor Steven M. Wisniewski

August 5, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Steven M. Wisniewski. Mr. Wisniewski is currently employed and registered with Newbridge Securities Corporation and works at the broker-dealer’s Boca Raton, Florida office, according to his publicly available BrokerCheck records maintained by the Financial Industry Regulatory Authority (FINRA).

Per his BrokerCheck report, Mr. Wisniewski was previously employed and registered by Cambridge Investment Research, Inc. from November 2012 to May 2015, Ridgeway & Conger, Inc. from September 2011 to November 2012, and J.P. Turner & Company, LLC from July 2003 to September 2011.

According to his BrokerCheck report, Mr. Wisniewski was the subject of a recent customer complaint received in or around April 2015 alleging churning, unauthorized trading, misrepresentation, negligence, forgery and fraud. The case is currently pending, with alleged damages of $200,000, according to BrokerCheck records.

BROKER REPORT: Financial Advisor Alexander P. Brown III

July 28, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Alexander P. Brown III. Mr. Brown is currently employed and registered with Capital Portfolio Management, Inc. and works at the broker-dealer’s Timonium, Maryland office, according to his publicly available BrokerCheck records maintained by the Financial Industry Regulatory Authority (FINRA).

Per his BrokerCheck report, Mr. Brown was previously employed and registered by Chapin, Davis from April 2008 to November 2015, a Baltimore, Maryland firm, and was discharged from that firm for “failure to follow written supervisory procedures for marking an account as deceased.” Prior to working at Chapin, Davis, Mr. Brown was employed and registered by Ferris, Baker Watts Incorporated from 2003 to 2008, also out of Baltimore, Maryland, according to his BrokerCheck report.

According to his BrokerCheck report, Mr. Brown was sanctioned in 2016 by the Maryland Securities Division and could not maintain discretionary accounts or serve in a supervisory capacity because he “continued to trade in discretionary account after client deceased while awaiting paperwork to retitle account.”

BROKER REPORT: Aegis’ Robert Guidicipietro

July 27, 2016 | Malecki Law Team

The investment and securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding Aegis Capital Corp. financial advisor Robert Guidicipietro.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Guidicipietro was most recently with JP Turner and Obsidian Financial prior to moving to Aegis Capital in 2012. According to industry records, Obsidian was expelled by FINRA in 2013, not long after Mr. Guidicipietro left the firm.

Mr. Guidicipietro has at least nine reportable disclosures on his FINRA record, including a civil judgment/lien, multiple customer disputes, multiple regulatory events and an “employment separation after allegations.”