A National Securities Arbitration & Investment Fraud Law Firm

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Two-South-Florida-Brokers-in-the-FINRA-Spotlight-for-Making-Inappropriate-Loans-300x199On May 1, 2018, FINRA Department of Enforcement entered into a settlement via Acceptance, Waiver, and Consent (AWC) with Respondent Laidlaw & Company. Without admitting or denying any wrongful acts, Laidlaw consented to a public censure by FINRA, the imposition of a $25,000 fine, as well as agreeing to give FINRA a written statement saying that systems mentioned in the AWC are designed to achieve compliance with “applicable securities laws, regulations, and rules.

FINRA Enforcement alleged that from April 2014 through December 2015, Laidlaw did not establish and maintain a supervisory system and written supervisory procedures (WSPs) designed to ensure that recommendations of leveraged and inverse exchange traded funds (Non-Traditional ETFs) complied with applicable securities laws and FINRA rules.

Non-Traditional ETFs are risky financial products because they are designed to return a multiple of an underlying benchmark or index over the course of a trading session. They are not intended to be held for more than a single trading session. FINRA Regulatory Notice 009-31 states “The performance of Non-Traditional ETFs over periods of time longer than a single trading session can differ significantly from the performance of their underlying or benchmark during the same period of time.”

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Silver Law Group filed a claim against Arete Wealth Management, LLC alleging Arete’s broker recommended numerous unsuitable non-traded REITs and leveraged ETNs and ETFs to our elderly client.

Are-or-Were-Unsuitable-Non-Traded-REITs-in-Your-Portfolio-300x224According to the FINRA arbitration complaint, the elderly Claimant entrusted the entirety of her retirement portfolio to Arete Wealth Management and its broker. The broker proceeded to recommend the senior Claimant invest approximately half a million dollars in various illiquid, non-traded REITs. Among other non-traded REITs, the Arete Wealth Management broker recommended the Claimant invest in American Finance Trust, Hospitality Investors Trust, benefit Partners Realty Trust, and FS Energy and Power Fund, according to the FINRA arbitration complaint.

In addition to Arete Wealth Management’s unsuitable recommendations to invest in non-traded REITs, the Arete Wealth Management broker also invested the elderly Claimant’s brokerage account in risky investments such as leveraged ETFs and ETNs, according to the securities arbitration claim. These leveraged ETFs and ETNs are typically meant to be held for no more than one day. The FINRA arbitration complaint alleges the Arete Wealth Management broker held them for far longer than one day – in some cases months. Claimant, according to the securities arbitration claim, lost a significant amount of money in her Arete Wealth Management brokerage accounts.

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Recently, we told you about a client dispute filed against broker and investment advisor  Shon Edward Flaharty (CRD #2666498), with LPL Financial LLC (CRD #6413) of Clearwater, FL.

Boca-Raton-Financial-Advisor-Robert-Child-Faces-Yet-Another-Customer-Dispute-300x199Flaharty’s recent disclosure, filed on 5/12/2018, has been settled. This customer dispute alleged, “over-concentration and unsuitability in connection with an ETF investment.”  The customer requested damages of $566,319.57, and LPL Financial has settled for $350,000. The allegations centered on dissatisfaction with the performance of an ETF investment. While the complaint was filed against Flaharty Asset Management (FAM), the investment adviser, and LPL Financial (LPL), Flaharty was not named in the action nor a party to the settlement.

Exchange traded funds (ETF) can be a suitable tool in an investor’s toolbox, but, if used improperly, an ETF can come with expensive commissions or high risk.  The market has introduced numerous ETF’s over the last decade and investors can potentially lose a large amount of money in many ETF’s.

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National Securities Corporation: Frequent Customer Disputes with FINRA on silverlaw.comHow the company has violated or been accused of violating FINRA regulations

It is always important for investors to have a good understanding of the financial professionals they work with. Before handing over money to anyone, brokers should be vetted properly. This is why the Financial Industry Regulatory Authority (FINRA) created its BrokerCheck reports.

Not only do these provide good information on where brokers are licensed and their work histories, but they also reveal customer disputes, discharges, and alleged improper activity. But these reports don’t just cover brokers – they also include their member firms.

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Some of National Securities Corporation’s FINRA-Reported Brokers on silverlaw.comThese four brokers have been accused of numerous infractions

National Securities Corporation has been operating for decades and has offices and brokers all over the U.S. Unfortunately, however, a significant percentage of their brokers have been involved in numerous customer complaints. Here are just a few examples of how National Securities employees have allegedly violated FINRA rules:

James Eichner

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Securities Arbitration Claims Against National Securities Corp. on silverlaw.comAccording to some reports, nearly 1/3 of National Securities brokers have had regulatory issues, legal disputes, or personal financial problems that have been disclosed to investors

National Securities Corporation is one of the oldest financial firms in the U.S., dating back over 70 years. Its the main office is in Seattle, Washington, but the company has licenses to operate in every state in the country, as well as the District of Columbia, Puerto Rico, and the Virgin Islands.

National Securities Corporation is registered with the SEC and three self-regulatory organizations: Nasdaq, Cboe BZX Exchanged, Inc., and the Financial Industry Regulatory Authority (FINRA) – and it is with the latter agency that the company has come under intense scrutiny over the last couple of decades.

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SEC Charges Texas Pastor and Former Louisiana Broker with Money Laundering and Wire Fraud on silverlaw.comThe elder financial fraud allegations reportedly cost elderly investors over $1M of retirement savings

Once a prominent Methodist pastor in Houston, Texas, Kirbyjon Caldwell is now charged by the SEC with numerous counts of money laundering and wire fraud. The charges are directly related to a scheme Caldwell and his partner, Gregory Alan Smith – a self-proclaimed financial advisor who was also charged – allegedly used to defraud elderly investors by selling them an interest in defunct, pre-Revolutionary Chinese bonds.

It is alleged that in 2013 and 2014, Caldwell and Smith singled out vulnerable investors to invest in bonds that had no more value than being collectible memorabilia – promising instead that they were worth millions.

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Here’s what you need to do now

Elder financial fraud continues to be a lucrative scheme in America, which is why seniors and their loved ones always need to keep their guard up. We have previously discussed how to spot fraud and what some financial institutions are doing to prevent it, and this piece serves as a guide on what to do about the fraud that has occurred.

Victims, their family members, or caregivers should follow these steps to help limit the damage:

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Individuals suffering from Alzheimer’s can be prime targets for financial predators

Unfortunately, we become more susceptible to financial scams from a wide range of offenders as we age. These include trusted advisors such as lawyers, accountants, and financial managers – as well as healthcare providers, caregivers, and even close family members.

Recent studies show that as our brains age, we become less able to detect deception and focus more on the potential for positive outcomes, especially when it comes to trusting people in our own social environment.

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This is one accusation comic book legend Stan Lee has made against his former manager

The latest proof that elder financial fraud could affect anyone comes courtesy of 95-year-old comic book legend Stan Lee. The creator of such notable characters as Spider-Man, Thor, and the Hulk recently filed a lawsuit against Jerardo Olivarez, his former manager and a former business associate of Lee’s daughter. In addition to fraud and misappropriation of his name and likeness, Lee has accused Olivarez of elder financial abuse.

Lee’s lawsuit – which was filed in April – calls Olivarez one of several “unscrupulous businessmen, sycophants and opportunists” who tried to take advantage of Lee after his wife Joan died in 2017. The suit alleges that shortly after Joan’s death, Olivarez coerced Lee into firing his long-time banker and lawyer and signing power of attorney over to him. He also convinced Lee to hire his own son as Lee’s attorney.

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