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Articles Posted in FINRA Arbitration

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Investors whose brokers or financial advisors recommended that they invest in Steepener Notes (a/k/a “Steepeners”) may have incurred losses due to the risky and complex nature of these products. Steepeners, which are tied to U.S. treasury interest rates, have left investors stuck in illiquid investments while receiving little to none of the regular income they were promised. What Is A Steepener Note? Steepener Notes are non-traditional and long-term investments that pay a quarterly or monthly interest payment that is tied to the yield curve, which measures the interest rates on U.S. Treasury securities. Steepener Notes are a type of “structured product”: for the first year or two, the issuer pays investors an above-average rate of interest (often referred to as “teaser” rate), and then, for the remainder of the note—often 15-30 years—the rate is determined by a complex formula.Investors whose brokers or financial advisors recommended that they invest in Steepener Notes (a/k/a “Steepeners”) may have incurred losses due to the risky and complex nature of these products. Steepeners, which are tied to U.S. treasury interest rates, have left investors stuck in illiquid investments while receiving little to none of the regular income they were promised.

What Is A Steepener Note?

Steepener Notes are non-traditional and long-term investments that pay a quarterly or monthly interest payment that is tied to the yield curve, which measures the interest rates on U.S. Treasury securities. Steepener Notes are a type of “structured product”: for the first year or two, the issuer pays investors an above-average rate of interest (often referred to as “teaser” rate), and then, for the remainder of the note—often 15-30 years—the rate is determined by a complex formula. Continue reading

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Silver Law Group is currently investigating broker-dealer firms and financial advisors that improperly marketed and sold Steepener Notes, which are non-traditional, long-term, illiquid, and highly complex products that many brokerage firms have been selling to unsuspecting clients over the past decade. Steepener Notes are structured products that pay a regular interest payment that is tied to the yield curve, which measures interest rates on U.S. Treasury securities. The amount of the payment is calculated based on the difference between long-term and short-term interest rates. Thus, the “steeper” the curve, the better the investment performs. However, it means that Steepener Notes are risky. If the yield curve is flat, as it has been for much of the last decade, the payments to investors are minimal or zero. Similarly, if the yield curve is inverted, as it was in 2018, investors do not receive any interest payments.Silver Law Group is currently investigating broker-dealer firms and financial advisors that improperly marketed and sold Steepener Notes, which are non-traditional, long-term, illiquid, and highly complex products that many brokerage firms have been selling to unsuspecting clients over the past decade.

Steepener Notes are structured products that pay a regular interest payment that is tied to the yield curve, which measures interest rates on U.S. Treasury securities. The amount of the payment is calculated based on the difference between long-term and short-term interest rates. Thus, the “steeper” the curve, the better the investment performs. However, it means that Steepener Notes are risky. If the yield curve is flat, as it has been for much of the last decade, the payments to investors are minimal or zero. Similarly, if the yield curve is inverted, as it was in 2018, investors do not receive any interest payments. Continue reading

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Jose Cornide (CRD#: 2785918), a currently-registered broker with UBS Financial Services (CRD#: 8174) in Coral Gables, Florida, is the subject of 12 disclosures on his publicly-available FINRA BrokerCheck report. All 12 disclosures are customer disputes. 11 of the customer disputes were filed in 2019 and 2020 and seem to involve investment in the UBS Yield Enhancement Strategy (YES), a complex options trading scheme that was marketed as safe, but actually involved significant risk and caused some investors to suffer considerable losses.Jose Cornide (CRD#: 2785918), a currently-registered broker with UBS Financial Services (CRD#: 8174) in Coral Gables, Florida, is the subject of 12 disclosures on his publicly-available FINRA BrokerCheck report. All 12 disclosures are customer disputes.

11 of the customer disputes were filed in 2019 and 2020 and seem to involve investment in the UBS Yield Enhancement Strategy (YES), a complex options trading scheme that was marketed as safe, but actually involved significant risk and caused some investors to suffer considerable losses. Continue reading

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GPB Capital Holdings, LLC is accused by Massachusetts securities regulators of violating state laws by misleading investors about its finances. GPB is now the subject of an administrative enforcement action from the Massachusetts Secretary of the Commonwealth Securities Division.  The action against the troubled New York-based alternative asset management firm was announced on May 27, 2020 and comes after GPB took in more than $14 million from over 180 investors in the state.  GPB raised at least $1.3 billion by paying high commissions to broker-dealers such as Sagepoint Financial for selling private placements in GPB’s funds to investors who were promised high dividend payments in return for their investment.GPB Capital Holdings, LLC is accused by Massachusetts securities regulators of violating state laws by misleading investors about its finances. GPB is now the subject of an administrative enforcement action from the Massachusetts Secretary of the Commonwealth Securities Division.

The action against the troubled New York-based alternative asset management firm was announced on May 27, 2020 and comes after GPB took in more than $14 million from over 180 investors in the state.

GPB raised at least $1.3 billion by paying high commissions to broker-dealers such as Sagepoint Financial for selling private placements in GPB’s funds to investors who were promised high dividend payments in return for their investment. Continue reading

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According to FINRA Disciplinary actions for January 2020, the following individuals were suspended from FINRA for failing to comply with a FINRA arbitration award or settlement agreement pursuant to FINRA rules:

NAME FORMER EMPLOYERS
  Callagy, Christopher   Aegis Capital Corp
  Oppenheimer & Co Inc
  Costanzo, Anthony   AXA Advisors, LLC
  Dininno, Matthew   Morgan Stanley
  Merrill Lynch, Pierce, Fenner & Smith Inc
  Dow, Rodrick   Securities America, Inc
  Cetera Financial Specialists LLC
  Eckstein, Matthew   Sisk Investment Services, Inc
  Gould, Ambroson & Associates LTD
  Fleming, David Jr.   Stifel, Nicolus & Company, Inc
  Sterne, Agee & Leach, Inc
  Kievman, Cary   Ameriprise Financial Services, Inc
  Morgan Stanley Smith Barney
  Krupnick, Jeffrey   Ameriprise Financial Services, Inc
  JHS Capital Advisors, LLC
  Lake, Jonathan   Wells Fargo Clearing Services, LLC
  Morgan Stanley
  McCutchen, Jerry Sr.   Berthel, Fisher & Company Financial Services
  Next Financial Group, Inc
  Roveccio, Rocco   First Standard Financial Company LLC
  Alexander Capital, LP

Continue reading

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Silver Law Group recently filed a FINRA arbitration claim against The O.N. Equity Sales Company (a/k/a ONESCO) (CRD# 2936) based on the recommendation of improper whole life insurance policies to a customer. The broker, Richard Michael Wesselt (CRD# 2195569), has five other pending customer disputes disclosed on his FINRA BrokerCheck Report, several of which mention insurance products as the basis of the allegations. ONESCO has already settled eight other customer disputes involving Wesselt. Wesselt has since left ONESCO and has been registered with Fortune Financial Services, Inc. (CRD# 42150) since September of 2017. Silver Law Group previously blogged about issues involving Wesselt.Silver Law Group recently filed a FINRA arbitration claim against The O.N. Equity Sales Company (a/k/a ONESCO) (CRD# 2936) based on the recommendation of improper whole life insurance policies to a customer. The broker, Richard Michael Wesselt (CRD# 2195569), has five other pending customer disputes disclosed on his FINRA BrokerCheck Report, several of which mention insurance products as the basis of the allegations. ONESCO has already settled eight other customer disputes involving Wesselt. Wesselt has since left ONESCO and has been registered with Fortune Financial Services, Inc. (CRD# 42150) since September of 2017.

Silver Law Group previously blogged about issues involving Wesselt. Continue reading

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For over 25 years, Silver Law Group has been representing investors in securities and investment fraud cases. A core part of our practice is representing investors in stockbroker misconduct cases which are generally administer by FINRA and hearings are held in major cities around the country. However, the current health crisis requires new policy and procedures to allow these cases to be heard without the need of an in-person hearing. We support FINRA’s actions especially because many elderly investors are the target of fraud, Ponzi schemes, unsuitable recommendations, and other misconduct which would prevent them from seeking justice because they cannot travel to a live hearing. Silver Law Group believes zoom hearings, similar to client meetings and other events can be held by zoom or other methods without damaging the securities arbitration process.For over 25 years, Silver Law Group has been representing investors in securities and investment fraud cases. A core part of our practice is representing investors in stockbroker misconduct cases which are generally administer by FINRA and hearings are held in major cities around the country. However, the current health crisis requires new policy and procedures to allow these cases to be heard without the need of an in-person hearing. We support FINRA’s actions especially because many elderly investors are the target of fraud, Ponzi schemes, unsuitable recommendations, and other misconduct which would prevent them from seeking justice because they cannot travel to a live hearing. Silver Law Group believes zoom hearings, similar to client meetings and other events can be held by zoom or other methods without damaging the securities arbitration process. Continue reading

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The Parking REIT said in an April, 2020 letter to investors that the option to provide liquidity to shareholders by listing common shares on a stock exchange is “not currently viable” and “there can be no assurance that the company will cause a liquidity event to occur in the near future or at all.”  This is disappointing news for investors in the non-traded REIT, which has already given them quite a bit of disappointment. In March, 2018, The Parking REIT announced that its board had unanimously approved the suspension of all cash distributions and stock dividends. The dividend paid by a non-traded REIT like The Parking REIT was its most appealing quality.The Parking REIT said in an April, 2020 letter to investors that the option to provide liquidity to shareholders by listing common shares on a stock exchange is “not currently viable” and “there can be no assurance that the company will cause a liquidity event to occur in the near future or at all.”

This is disappointing news for investors in the non-traded REIT, which has already given them quite a bit of disappointment. In March, 2018, The Parking REIT announced that its board had unanimously approved the suspension of all cash distributions and stock dividends. The dividend paid by a non-traded REIT like The Parking REIT was its most appealing quality. Continue reading

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According to FINRA Disciplinary actions for April 2020, the following individuals were suspended from FINRA for failing to comply with a FINRA arbitration award or settlement agreement pursuant to FINRA rules:

NAME FORMER EMPLOYERS
  Neal Carlson   Wells Fargo Clearing Services, LLC
  Wells Fargo Advisors, LLC
  Michael Carter   Morgan Stanley
  Ameriprise Financial Services, Inc.
  John Church   Waddell & Reed
  Cetera Advisor Networks LLC
  Gregory Clark   Burch & Company, Inc.
  Raymond James & Associates, Inc.
  Avelino Cortina III   AC3 Capital, LLC
  Wells Fargo Advisors,LLC
 William Despard   Morgan Stanley
  Citigroup Global Markets Inc.
  Michael Guilfoyle   Four Points Capital Partners LLC
  IFS Securities
  Kenneth Klaiman   Raymond James & Associates, Inc.
  Deutsche Bank Securities Inc.
  Paul Liebman   Wells Fargo Advisors Financial Network, LLC
  Oppenheimer & Co, Inc.
  Adam Morsi   Four Points Capital Partners LLC
  IFS Securities
  Gary Orcutt   Securities America Inc
  USAdvisors Wealth Management
  Vernon Sears, Jr.   Wells Fargo Clearing Services, LLC
  Raymond James & Associates, Inc.
  Damion Smith   Morgan Stanley
  UBS Financial Services Inc.
  Walter Sweatt II   Morgan Stanley
  Wells Fargo Advisors, LLC

Continue reading

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Silver Law Group recently filed a FINRA arbitration claim on behalf of a customer of David Krumrey of Oppenheimer & Co.  Among other things, the suit alleges breach of fiduciary duty, negligence, breach of contract, and failure to supervise resulting in substantial investment losses in the customer’s account. Silver Law Group has been investigating Oppenheimer & Co., Inc. and its registered representative David Krumrey. According to Krumrey’s CRD Report, published by the Financial Industry Regulatory Authority (“FINRA”), Krumrey was permanently barred from the securities industry and is the subject of several customer disputes arising out of his conduct over the past several years. It is likely that Krumrey was engaged in widespread misconduct across many customer accounts. Silver Law Group believes Krumrey’s employing broker-dealer firm, Oppenheimer & Co. Inc., may be liable for this misconduct.Silver Law Group recently filed a FINRA arbitration claim on behalf of a customer of David Krumrey of Oppenheimer & Co.  Among other things, the suit alleges breach of fiduciary duty, negligence, breach of contract, and failure to supervise resulting in substantial investment losses in the customer’s account.

Silver Law Group has been investigating Oppenheimer & Co., Inc. and its registered representative David Krumrey. According to Krumrey’s CRD Report, published by the Financial Industry Regulatory Authority (“FINRA”), Krumrey was permanently barred from the securities industry and is the subject of several customer disputes arising out of his conduct over the past several years. It is likely that Krumrey was engaged in widespread misconduct across many customer accounts. Silver Law Group believes Krumrey’s employing broker-dealer firm, Oppenheimer & Co. Inc., may be liable for this misconduct. Continue reading

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