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BROKER REPORT: Clark Gardner Barred by the SEC and FINRA

June 27, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding former stockbroker Clark Gardner. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Gardner is no longer FINRA licensed to sell investments. He has also reportedly been the subject of no less than six reportable events, including customer complaints and regulatory investigations.

Per FINRA, Mr. Gardner was permanently barred by both FINRA and the SEC from the financial services industry. The FINRA investigation of Mr. Gardner reportedly surrounded the conversion of $243,000 of customer funds. Per his BrokerCheck report, Mr. Gardner also served as an agent for a real estate investment company without required approval of his firm.

Mr. Gardner has been the subject of customer complaints as well. Customers have alleged that Mr. Gardner breached fiduciary duties and recommended unsuitable investments. According to FINRA records, one customer dispute is presently pending, while another was settled for $263,000.

Trust Funds: Potential Playground for Abusive Financial Advisors

May 9, 2016 | Malecki Law Team

Trust Funds are an especially susceptible vehicle for fraud committed by FINRA registered stock brokers and financial advisors. Two of the primary issues in such cases are “conflict of interest” and “breach of fiduciary duty.”

Trust funds can be created for a wide variety of reasons. Frequently, though, they are used as a means to afford an orderly transfer of wealth to a younger generation. They can offer a whole host of benefits that would make a trust fund the preferred choice over an outright gift. For example, the recipient/beneficiary may be very young, and the trust could afford some level of control or stability to prevent the beneficiary from squandering the money. Another reason may be certain tax advantages offered by the trust structure that would not be available in an outright give.

Regardless of the reason or reasons for its creation, a trust is going to need a trustee. The trustee is the party responsible for overseeing the trust and managing its assets. While trusts can hold different types of assets, they frequently contain securities, like as stocks and bonds. Therefore, such trusts would, by necessity, involve brokerage accounts. In that case, clients will oftentimes look to their stockbroker/financial advisor to put on a “second hat” and serve as trustee. The logic being “I already trust him/her with my money so why not let them be the trustee.” However, this is where significant problems can be created.

FINRA FOCUS: Senior Investors

February 4, 2016 | Malecki Law Team

FINRA’s recently released Regulatory and Examinations Priority Letter made specific mention of multiple critical areas that the regulator will be focused on for the upcoming year. The one that we will focus on today is the Senior investor and the steps that are and should be taken to prevent elder abuse.

As we have discussed here before, with the growing population of senior aged investors, this demographic is becoming increasingly significant in the retail investor pool nationwide. Baby boomers are beginning to hit retirement age just as advancements in technology and medicine are leading to longer and longer lifespans.

Per 2012 census data, there are 76.4 million baby boomers which represent close to one-quarter of the then estimated U.S. population of 314 million. These figures have coupled with longer lifespans across the boards, means that there is the potential for disaster if baby boomers’ retirement savings are not properly managed. FINRA recognizes that “the consequences of unsuitable investment advice can be particularly severe for this investor group since they rarely can replenish investment portfolios with fresh funds and lack the time to make up losses.”

Investor Recovery Options As Tortoise Capital Advisor Funds Suffer Losses

January 29, 2016 | Malecki Law Team

The securities and investment fraud attorneys at Malecki Law are interested in hearing from investors in Tortoise Capital Advisors and explore their potential options for recovering their losses.

The Kansas-based Tortoise Capital Advisors is a “privately owned investment manager . . . that primarily provides its services to high net worth individuals . . . and caters to corporations, pooled investment vehicles, investment companies, and pension and profit sharing plans . . . typically invest[ing] in [the] energy and infrastructure sector,” per Bloomberg Business.

Among Tortoise’s portfolio of funds, a number of them declined between 17% and 36% in 2015 alone, per Morningstar.

BROKER REPORT: M&T Securities Financial Advisor Christopher T. Fenton

January 26, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Christopher T. Fenton. Mr. Fenton is currently employed and registered with M&T Securities, Inc., a broker-dealer, working out of the Buffalo, New York office, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority. He was also previously registered with Pruco Securities Corporation.

According to his BrokerCheck report, Mr. Fenton has been the subject of three customer complaints while employed by M&T Securities, Inc. The latest customer complaint led to a FINRA arbitration proceeding, according to BrokerCheck records. The BrokerCheck records reveal that the customer alleged that misrepresentations, breach of fiduciary duty and recommendation of unsuitable investments were made. The dispute resulted in an award to the customer, according to the BrokerCheck report.

A review of the award, publicly available from FINRA’s website, discloses that the claimant also alleged that the causes of action related to an M&T Portfolio Architect Account and Rochester Fund Municipals. The award also disclosed that Mr. Fenton and his firm were found to be jointly and severally liable to the claimant for the award, as well as a portion of fees the claimant incurred in bringing the claim.

Potential Recovery Options for OncoMed (OMED) Investors

January 25, 2016 | Malecki Law Team

Shares of OncoMed (OMED) plunged more than 40% today, January 25^th, in the wake of a report concerning a pancreatic cancer drug the company had reportedly been working on. According to Marketwatch, “an independent data safety monitoring board advised ‘of several findings regarding futility’ of a Phase 2 treatment of pancreatic cancer.’”

Investors who have lost money in OncoMed may be legally entitled to recover some or all of their losses and are encouraged to contact the attorneys at Malecki Law to explore their rights.

Unfortunately, issues like the one presently facing OncoMed can happen in the market. Even more unfortunate is that often times financial advisors will improperly advise their clients to take large positions in advance of the release of a report concerning a company’s prized drug, like Tarextumab.

BROKER REPORT: Scott Teich of Raymond James in Florida

January 15, 2016 | Malecki Law Team

The securities and investment fraud attorneys are interested in hearing from investors with complaints involving Scott Teich of Raymond James. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Teich is a registered stock broker with Raymond James, based out of Florida.

Mr. Teich’s BrokerCheck Report indicates that he has been the subject of at least six customer complaints. He has also reportedly been the subject of an “employment separation after allegations.”

In addition to Raymond James, Mr. Teich has also been registered with Gruntal & Co., First Colonial Securities, Paragon Capital Corp (which FINRA reports was “expelled” from FINRA in 2004).

Malecki Law Investigating Oil and Gas MLP Losses

January 12, 2016 | Malecki Law Team

Oil briefly dropped below $30 per barrel today. For those who drive SUVs, this may feel like a blessing. However, for those who are heavily invested in Oil and Gas, it can be frightening. People who invested in Oil and Gas at the recommendation of their financial advisor may be feeling anger and confusion, in addition to that fear – these investors rightfully want answers.

Aside from buying Oil and Gas futures directly, there are two frequently used products that investors use to invest in Oil and Gas – Master Limited Partnerships (MLPs) and Exchange Traded Funds (ETFs).

As we wrote here last year, investors lost millions as gas prices dropped at the beginning of 2015. As prices have continued to slide over the past 12 months, losses have compounded. This is terrible news for those whose financial advisors recommended that they invest in Oil and Gas, and then convinced them to stay in and “ride it out” on promises of a price recovery.

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.

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.